October 22, 2012
In the euro-zone, the worst of the crisis is probably yet to come,” states the Capital Economic’s research team in a recent report. The forecast is dark for the area, “With politicians unable to accelerate progress towards fiscal and banking sector union, we expect the euro-zone to suffer a deep recession of 2.5% next year.”
In these circumstances, Capital Economics believes “Greece is still likely to exit the single currency within a matter of months, and other small peripheral economies may follow.”
In 2014 the recession may be moderating, but GDP would fall another 1%.