Morgan Stanley has made a downward revision to its estimates for the Greek economy, as the downturn in the eurozone is proving much worse than originally forecast. The international firm now expects gross domestic product to shrink by 0.5 percent this year, compared with 0.1 percent growth projected in its previous report for 2009. For next year it foresees growth but at just 1.3 percent, against an original rate of 2.3 percent. There has been a downward revision for the whole of the eurozone, where contraction will reach 3.3 percent, Morgan Stanley forecasts, which is more than twice the original estimate of 1.6 percent. The reasons for this revision «are not easy to pin down,» says the report, as economic activity and confidence indices are in free fall in the eurozone, in conjunction with revised growth estimates in key export markets for the eurozone such as Central and Eastern Europe. Yet despite the negative forecasts, Morgan Stanley believes that a long period of depression can be avoided in the eurozone as monetary policy is quite flexible and has already been combined with liquidity injection programs and schemes in support of banks. For 2010 growth will be at 0.5 percent, down from the originally forecast rate of 1.1 percent, but at least there will be no depression, the report suggests.