March 4, 2020 / 5:02 PM / 3 months ago

S&P Global halves eurozone growth forecast, flags gloom for Italy

LONDON (Reuters) - Coronavirus worries saw credit rating agency S&P Global halve its eurozone growth forecast for the year to 0.5% from 1% on Wednesday and predict a 0.3% contraction for hard hit Italy.

Germany’s heavyweight economy is likely to stagnate it added while Britain’s growth will also get pegged back to 0.8%.

“The short-term outlook for the European economy has deteriorated,” a group of the firm’s senior economists said in a report. “We now foresee a U-shaped recovery of activity starting in the second quarter, but expect it will be fragile.”

They added that not all European countries have huge fiscal space to help, and fiscal stimulus might come too late to cushion the current downturn.

Reporting by Marc Jones, editing by Karin Strohecker

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