Euro zone to exit recession, but weak growth lies ahead: Reuters poll

Tue Aug 13, 2013 1:39pm EDT
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By Andy Bruce

LONDON (Reuters) - The euro zone has probably escaped from its lengthy recession, although there is little prospect the economy will start growing again at a healthy rate before 2015, according to a Reuters poll of 30 economists.

Respondents were almost unanimous that data on Wednesday will show the euro zone economy stopped contracting from April through June for the first time since the end of 2011. The consensus showing modest growth of 0.2 percent on the quarter.

The survey was mostly conducted before industrial production figures published Tuesday showed a 0.7 percent rise on the month in June, growing again after a slight drop in May and reinforcing expectations the euro zone economy is stabilizing.

Still, few expect any kind of significant upturn from here.

The median outlook suggested euro zone gross domestic product (GDP) growth is unlikely to exceed 0.4 percent in any quarter from now until 2015.

As before, survey data suggest Germany is leading the way, with the ZEW economic sentiment index for August exceeding expectations.

"Fiscal policy is becoming less of a constraint, and that's a plus, and monetary policy (is) steadily becoming more aggressive, which is appropriate and that helps," said Mark Zandi, chief economist of Moody's Analytics, on the prospects for the euro zone.

Only one forecaster predicted any quarter of contraction between now and the end of 2014.   Continued...

A Spanish flag flutters near the dome of the Bank of Spain in central Madrid February 15, 2010. REUTERS/Sergio Perez