EU Growth Seen At 1.7% In 2011, 2% In 2012

The European Commission Monday said it expects weak global markets and government deficit cuts entering into force across the European Union to drive a "gradual and rather uneven" recovery across the 27 EU member countries.

The commission sees EU gross domestic product growing 1.7% in 2011, unchanged from its forecast in May, and 2% in 2012. The EU executive raised its GDP forecast for 2010 to 1.8% from 1% in May, after stronger-than-expected second-quarter growth.

But the threat of more turmoil in the euro-area sovereign debt markets means risks to the outlook are "tilted towards the downside," said Marco Buti, head of the commission's Economic and Financial Affairs division.

"A replay of the negative feedback loop between rising sovereign risk premia, banks' ability to lend and economic growth prospects cannot be excluded," Buti said in a statement.

Read Full Article from Wall Street Journal

- Posted: 2010-11-29 08:44:37

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