S&P lowers eurozone growth forecasts

The international ratings agency Standard and Poor's slashed its 2012-2013 eurozone growth forecasts on Tuesday, and now expects a slightly stronger economic contraction this year. S&P said that business activity would likely decline by 0.8 percent across the 17-nation bloc rather than by 0.7 percent, its previous forecast issued in July. For 2013, the ratings agency expects the eurozone economy to record no growth, revising the earlier outlook for a slight expansion of 0.3 percent. "Recent economic indicators continue to paint a bleak picture for Europe," a statement quoted Jean-Michel Six, S&P chief economist for Europe as saying. "The data are confirming our view that the region is entering a new period of recession, after three quarters of negative or flat growth since the final quarter of 2010," he added. A breakdown by country showed Spain in the most dire position, with a projected contraction of 1.8 percent this year followed by a decline of 1.4 percent in 2013. That compared with previous estimates of -1.7 percent and -0.6 percent. Germany, the biggest eurozone economy, is forecast to post growth of 0.6 percent this year, unchanged from the previous outlook, followed by a 1.2 percent expansion in 2013, slightly below the earlier figure of 1.4 percent.