Wednesday, October 24 15:15:01
On the euro zone periphery, only Ireland looks on course for a return to modest growth any time soon, according to a Reuters poll of European economists today.
Ireland's economy should manage growth of around 1.5 percent next year, after eking out a 0.3 percent expansion this year.
Furthermore, it looks on track with its budget deficit targets. While austerity has hit the country's population hard, the unemployment rate should recede a little next year to around 14.2 percent, from 14.8 percent currently.
"It probably should be clear by the middle of next year that the economy is starting to turn a little bit stronger. That presumes that we don't see any more negative shocks," said Austin Hughes, chief economist at KBC in Dublin.
The euro zone's most vulnerable economies, particularly Spain, face a much tougher 2013 than thought just three months ago, marked by prolonged recession and ever-rising unemployment, the Reuters poll showed.
The survey adds to a growing sense that austerity is putting too great a burden on debt-stricken countries, a week after the International Monetary Fund said they should be allowed more time to cut budget deficits.
Forty-nine economists polled this week slashed their 2013 outlook for Greece and Portugal as well as Spain, which they believe faces a downturn next year three times larger than projected by the government.
All 16 economists who answered an extra question said they agreed with the International Monetary Fund's idea of giving debt-stricken countries more time to cut their budget deficits.
Severe budget austerity measures have caused these economies to shrink far more than authorities predicted, leaving millions more people out of work. Next year promises no reversal to the trend of rising unemployment, the poll suggested.
"In that environment, I find it very difficult to see how the growth outlook is going to be that materially different next year," said James Nixon, chief European economist at Societe Generale. Depression-mired Greece may have to wait until at least 2014 before its economy grows. And the survey also underlined why Spain, the euro zone's No. 4 economy, is the new focal point of the sovereign debt crisis.