Brussels – On Thursday, the European Union readjusted their projection of growth this year lowering it compared to their initial forecast and made a precautionary statement that the euro region would experience a “mild recession” drawing additional concerns on the Continent’s economic prospects and those involved in financial spread betting. As stated in the forecast by the European Union, nations involved in the euro currency zone will probably decrease in growth by 0.3 per cent for the entire year of 2012 in contrast to the previous announcement of a 0.5 per cent growth last November. The new figures reported are said to encourage countries affected to prioritize executing austerity measures to settle transactions with the debt markets rather than boosting economic growth that can actually pull them out of their financial troubles.
Some of the factors leading to the decrease in forecast were the reduced growth projections of 1.3 per cent in Italy and 1 per cent in Spain which are countries considered to be among two of the largest economies in the euro zone experiencing debt problems as well. Out of the three nations which received international financial aid, it was only Ireland which was expected to see minor growth while Greece and Portugal are dreaded to experience finding themselves in deeper financial pits.
The gross domestic product of countries part of the European Union will remain levelled, according to the commission forecast. “The E.U. is set to experience stagnating G.D.P. this year and the euro area will undergo a mild recession,” the report said. The European Commissioner for economic and monetary affairs, Olli Rehn said, “Prospects have worsened and risks remain but there are signs of stabilization especially in the recent period,” as he also added, “Financial markets remain rather fragile but there are signs of stabilization.” Since the issue of Greece getting its bailout package, premium costs for borrowing money by other financially challenged nations are said to have decreased as Mr. Olli Rehn mentioned, “With the exception of Greece spreads have come down since mid-November.”
The forecast last November also included predicting Germany, the economic engine of Europe, to only climb up to 0.8 per cent growth this year. This was further reduced to 0.6 per cent on Thursday while separately; signs of German business sentiments have increased unexpectedly boosting positive outlooks toward the country’s economy after falling back by 0.2 per cent in the last quarter of 2011.