VIENNA (dpa-AFX) - Professional forecasters downgraded their Eurozone economic outlook citing weak domestic demand and the subdued outlook for exports to China and Brazil.
According to results of the Survey of Professional Forecasters released Thursday with the European Central Bank monthly bulletin, real gross domestic product will shrink 0.6 percent in 2013, sharper than the 0.4 percent drop estimated in the previous survey period.
Respondents cited the weaker-than-expected euro area domestic demand in the first quarter of this year as the main factor behind the downward revisions for 2013.
Going forward, the economy will grow 0.9 percent in 2014 and 1.5 percent in 2015, it said. But the projections reflect downward revisions from 1 percent and 1.6 percent, respectively. The slight downward revisions are also mainly attributed to lower domestic demand, the report said.
The ECB targets inflation of 'close to, but below 2 percent'. Forecasters project 1.5 percent inflation this year and next and 1.8 percent in 2015.
The estimates for 2013 and 2014 were revised downward from 1.7 percent and 1.6 percent, respectively, while the forecast for 2015 was left unrevised.
Respondents attributed these revisions to weaker economic activity and labor markets, lower commodity prices, and smaller contributions to inflation from indirect taxes and administered prices as a result of delayed fiscal consolidation measures.
Unemployment expectations were revised upward, except those for 2013. The jobless rate is seen at 12.3 percent this year, and 12.4 percent next year, up from the previous estimate of 12.2 percent. The survey was conducted between July 16 and 19.
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