Rating agency Standard and Poor’s (S&P) has slashed its Eurozone growth forecasts.
It now expects a slightly stronger economic contraction this year.
The international ratings agency said that business activity would likely decline by 0.8% across the 17-nation bloc rather than by 0.7%.
This was its previous forecast issued in July.
For 2013 the ratings agency expects the Eurozone economy to record no growth however.
It has revised the earlier outlook for a slight expansion of 0.3%.
“Recent economic indicators continue to paint a bleak picture for Europe” a statement quoted S&P chief economist for Europe Jean-Michel Six.
“The data are confirming our view that the region is entering a new period of recession, after 3/4 of negative or flat growth since the final quarter of 2010″ he added.
A breakdown by country showed Spain in the most dire position with a projected contraction of 1.8% this year followed by a decline of 1.4% in 2013.
While Germany is forecast to post growth of 0.6 percent this year which is unchanged from the previous outlook.
Related stories
href="http://www.newstalk.ie/2012/news/spains-credit-rating-cut/">Spanish credit rating cut by S&P
href="http://www.newstalk.ie/2012/news/business/sp-set-to-downgrade-eurozone-states-report/">S&P set to downgrade Eurozone states ”“ report
