Euro zone may contract 0.2-0.3 pct in 2013 -ECB's Nowotny

VIENNA Fri Feb 15, 2013 2:30am EST

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VIENNA Feb 15 (Reuters) - The euro zone economy may shrink by around 0.2-0.3 percent as a north-south divide in output worsens, European Central Bank policymaker Ewald Nowotny told an Austrian newspaper.

"In Europe we have to assume a negative development in 2013 that can be around minus 0.2 or 0.3 percent," he told the Vorarlberger Nachrichten, citing a "massive economic divergence between the southern and other countries that could get even worse".

ECB staff projected in December that euro zone economic output this year would range between a contraction of 0.9 percent and growth of 0.3 percent.

The currency bloc slipped deeper into recession in the last three months of 2012 after its largest economies, Germany and France, shrank at the end of a wretched year for the region.

Nowotny, who also heads the Austrian National Bank, said it may raise its growth forecast for the domestic economy to 0.7-0.9 percent from its most recent outlook of 0.6 percent.

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