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Euro zone may contract 0.2-0.3 percent in 2013: ECB's Nowotny
February 15, 2013 / 7:37 AM / 5 years ago

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

VIENNA (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.

European Central Bank (ECB) Governing Council member Ewald Nowotny of Austria talks during the presentation of the European Bank for Reconstruction and Development (EBRD) transition report 2012 in Vienna January 30, 2013. REUTERS/Heinz-Peter Bader

“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.

Reporting by Michael Shields; editing by Patrick Graham

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