Greece, Spain and Portugal face a tougher 2013 than previously thought, while the outlook for growth in Ireland, the only bright spot among the eurozone’s most vulnerable economies, was cut for the first time in nearly a year.
A Reuters poll of 46 economists published on Wednesday showed austerity has caused the southern economies to shrink far more than authorities predicted but will only lead to slow fiscal improvement and unemployment will keep rising.
The outlook for Spain, Portugal and Greece has worsened in almost every quarterly poll since the first one was conducted in June 2011.
The forecast for Irish growth was cut for the first time since April 2012.
The gloom is incongruous with optimism in financial markets that started when European Central Bank President Mario Draghi promised in July to do “whatever it takes” to preserve the euro.
The poll showed that Greece, Portugal and Spain should exit recession next year, although growth will be so slow that it will hardly make up for the huge declines in output since the start of the sovereign debt crisis in 2010.
Greece, in particular, is destined to suffer another year of depression, and worse than October’s forecast, although economists think it will make better progress in slimming its budget deficit.
The economy will shrink around 4.3 percent this year compared to the 3 percent decline penciled in last October.
Economists think the jobless rate will reach 26.5 percent by the end of the year.
Still, the poll suggested the Greek depression is starting to ease, even if a recovery may be years off.
The economy will eke out a tiny amount of growth in 2014, perhaps around 0.2 percent, the poll showed.