ECB survey sees lower eurozone growth in 2013, 2014

Professional forecasters surveyed by the European Central Bank have cut their eurozone growth forecasts for this year and next year, the ECB said on Thursday.

According to the ECB's quarterly Survey of Professional Forecasters, the eurozone economy will not grow at all this year, instead of notching up modest growth of 0.3 percent as had previously been predicted, the ECB wrote in its monthly bulletin for February.

And next year, eurozone gross domestic product (GDP) will expand by 1.1 percent, not 1.3 percent as the last SPF survey in November had projected.

"According to the respondents, the main factor behind the downward revision for 2013 is the weaker than expected development in economic activity in the fourth quarter of 2012," the ECB explained.

According to data published by the EU's Eurostat agency, the 17-country eurozone slid deeper into recession in the fourth quarter of 2012, with the economy shrinking by 0.6 percent after already contracting by 0.1 percent in the preceding quarter.

That meant that for 2012 as a whole, the eurozone economy contracted by 0.5 percent, Eurostat calculated.

"Lower contributions from private and public consumption to growth for the current year and the next year are forecast, owing to prolonged uncertainty in the euro area, as well as to further fi scal consolidation," the ECB said.

At the same time, positive contributions to growth would continue to come from external demand, it said.

"On balance, respondents expect a return to a sustained expansion of real GDP in mid-2013," the ECB said.

Turning to the inflation outlook for the 17 countries that share the euro, the ECB survey saw a slight downward revision to the forecast to an annual average 1.8 percent for both this year and next year from 1.9 percent previously.

"These revisions mainly reflect weaker economic activity and labour markets and more favourable developments in commodity prices," the ECB said.