Investment Contrarians Expert Reports: Recent GDP Growth Estimates from the European Commission Suggest Eurozone Financial Crisis to Continue Impacting Non-Eurozone Count

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In a recent Investment Contrarians article, editor George Leong reports that the European Commission recently predicted that the eurozone’s gross domestic product (GDP) growth will contract 0.4% this year, and grow a muted 0.1% in 2013. (Source: European Commission, last accessed November 12, 2012.) Leong notes that the slowing of GDP growth in the eurozone is having a negative impact on the non-eurozone countries, meaning that the financial crisis is now spreading to the union’s stronger economies.

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Investment Contrarians Expert Reports: Recent GDP Growth Estimates from the European Commission Suggest Eurozone Financial Crisis to Continue Impacting Non-Eurozone Countries into 2013

There are six eurozone countries in a recession, with the whole region threatening to collapse into a recession in 2013.

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In a recent Investment Contrarians article, editor George Leong reports that the European Commission recently predicted that the eurozone’s gross domestic product (GDP) growth will contract 0.4% this year, and grow a muted 0.1% in 2013. (Source: European Commission, last accessed November 12, 2012.) Leong notes that the slowing of GDP growth in the eurozone is having a negative impact on the non-eurozone countries, meaning that the financial crisis is now spreading to the union’s stronger economies.

“[There are] six eurozone countries in a recession, with the whole region threatening to collapse into a recession in 2013,” states Leong. “There’s barely any gross GDP growth while debt levels surge.”

Leong reports that GDP growth in the United Kingdom was slashed to a mere 0.9% in 2013, down from the prior estimate calling for growth of 1.3%. (Source: European Commission, last accessed November 12, 2012.) He points out that GDP growth could be even worse should the eurozone fail to sufficiently recover.

“Of course, the problem is that the spotlight on the massive debt and bailouts of Greece and possibly Spain takes the focus away from trying to remedy GDP growth in Europe,” reasons Leong.

According to the Investment Contrarians expert, while Greece is still trying to pass its own austerity plan, in order to receive further emergency funds, the deep budget cuts are occurring at a time of fiscal confusion, massive unemployment, and negative GDP growth.

“The deep cuts will hurt the country more in the short term,” states Leong, “but they are needed to help Greece become a contributing member of the eurozone. It could take decades.”
He adds that Spain is also presenting an aggressive austerity plan that focuses on budget cuts in lieu of tax increases. But, Leong notes that the distress with the weak members of the eurozone is now spreading, and is already negatively impacting France and Germany, the only two strong pillars in the eurozone.

“The Federal Reserve and the European Central Bank (ECB) continue to buy bonds to keep yields in the troubled countries from surging higher,” concludes Leong. “But this is only a bandage solution; it is not a remedy.”

To see the full article, and to get a real contrarian perspective on investing and the economy, visit Investment Contrarians at http://www.investmentcontrarians.com.
Investment Contrarians is a daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”

The editors of Investment Contrarians believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing, and an unprecedented expansion of our money supply. The “official” unemployment numbers do not reflect people who have given up looking for work, and are thus skewed. They believe the “official” inflation numbers are also not reflective of today’s reality of rising prices.

After a 25- to 30-year down cycle in interest rates, the Investment Contrarians editors expect rapid inflation caused by huge government debt and money printing will eventually start us on a new cycle of rising interest rates.

Investment Contrarians provides unbiased research. They are independent analysts who love to research and comment on the economy and investing. The e-newsletter’s parent company, Lombardi Publishing Corporation, has been in business since 1986. Combined, their economists and analysts have over 100 years of investment experience.

Find out where Investment Contrarians editors see the risks and opportunities for investors in 2012 at http://www.investmentcontrarians.com.

George Leong, B. Comm., one of the lead editorial contributors at Investment Contrarians, has just released, “A Problem 23 Times Bigger Than Greece,” a breakthrough video where George details the risk of an economy set to implode that is 23 times bigger than Greece’s economy! To see the video, visit http://www.investmentcontrarians.com/press.

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