Growth in sight for euro zone economy, but no big upturn: poll

Tue May 14, 2013 10:19am EDT
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By Andy Bruce

LONDON (Reuters) - Growth will return to the euro zone's recession-mired economy in the second half of this year, but economists see no chance it will recover strongly until at least 2015, a Reuters poll showed on Tuesday.

The euro zone has been stuck in recession since the end of 2011 and data on Wednesday is expected to show the economy shrank again between January and March, by 0.1 percent.

However, the latest poll of 65 economists, taken this week, suggested that should be the end of its declining streak.

The economy is expected to stagnate in the current quarter, before eking out 0.2 percent growth for the next few quarters thereafter.

But with austerity and rising unemployment still taking its toll across the continent, few foresaw any prospect of growth picking up much before 2015 - especially with such deep divisions running between the euro zone's constituent countries.

"Prospects for the euro area are bleak," said Tatiana Fic, senior research fellow at Britain's National Institute of Economic and Social Research.

"Growth divergences persist among euro area members. Further contractions in 2013 are projected for Greece, Italy, Portugal and Spain, while modest positive growth rates are projected for Austria, Belgium, Ireland and Germany."

Although business surveys suggested German companies fared badly last month, data on Tuesday showed investor morale in Europe's largest economy pointed to a timid recovery, which would help lift the wider euro zone.   Continued...

An illustration picture shows Euro coins, photographed in Warngau April 3, 2013. REUTERS/Michael Dalder