Euro zone economy could contract by 1.5 pct/GDP - S&P

BRUSSELS Sat Jan 14, 2012 10:37am EST

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BRUSSELS Jan 14 (Reuters) - The euro zone economy has a 40 percent chance of going into recession this year, with a contraction of up to 1.5 percent, ratings agency Standard & Poor's said on Saturday as it warned governments their policies were too focused on cutting debt.

"The risk of recession is rising and we are now forecasting a recession with a 40 percent probability for this year," S&P credit analyst Moritz Kraemer told a conference call.

"That could lead to a euro zone economic contraction of around 1.5 percent."

S&P downgraded the sovereign debt ratings of nine of the euro zone's 17 member states on Friday and said in the call with investors and reporters that it was disappointed the European Central Bank had not stepped up its purchases of the bloc's bonds in the secondary market to calm investors.

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Comments (1)
WallStRanter wrote:
Well just like it’s credit downgrades S&P is always late to the game. The Eurozone chance of a recession is MUCH higher then 40%. They are already in a recession! Come on…….

www.wallstreetrant.com

Jan 16, 2012 12:50am EST  --  Report as abuse
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