Feb. 2 (Bloomberg) -- Euro-area economic growth will recover this year after the region’s debt crisis damped confidence and output, Ireland’s central bank said in its quarterly bulletin.
“Growth in the euro area is expected to pick up during the course of 2012 and to improve somewhat further in 2013,” the Dublin-based institution said in the report today. Still, “risks to the outlook remain firmly on the downside and relate to a further intensification of the tensions in euro-area financial markets and their potential spill-over to the euro area real economy.”
The ECB last year cut interest rates to a historic low and injected a record 489 billion euros ($643 billion) into the banking system to unlock credit. The Frankfurt-based ECB forecasts the economy of the 17-nation euro region will grow 0.3 percent this year and 1.3 percent next year.
“The slowdown in world trade is expected to have a significant impact on exports and investment” in Germany, which has driven euro-area growth in the past two years, the Irish central bank said. “But overall activity is set to recover gradually throughout the year as confidence improves.”
--Editors: Matthew Brockett, Jeffrey Donovan
To contact the reporter on this story: Jana Randow in Frankfurt at firstname.lastname@example.org
To contact the editor responsible for this story: Craig Stirling at email@example.com