No way, the end of the tunnel is still not in sight. Indeed, this year there are greater risks for the economic recovery than last spring. This was announced by the international agency Moody's who explained that emerging economies will slow down more than expected and that the Eurozone debt crisis will continue to endanger the global scenario. Moody's' greater pessimism is due to the fact that the recession that hit Europe was deeper than expected causing a more substantial credit contraction and therefore slowing down already weak investments: "The political and financial uncertainty in Greece and the potential tensions on financing in Spain and Italy have increased the risk of a strong economic and financial instability with possible global reverberations”, explains the agency in a note.
Furthermore, the consequent slowdown in China, India and Brazil weighed on the risk of worsening of the crisis; the oil price shock; and the risk of severe and sudden fiscal tightening in the US next year. So, for the G20 countries, Moody's expects a 2,8% increase in GDP in 2012 and 3,4% in 2013, compared to 3,2% in 2011 and 4,6% in 2010.
ITALY – Moody's has not spared harsh comments on Italy. Tensions over debt financing, and the uncertain background of the Greek and Spanish crises, led the rating agency to revise downward forecasts on the Italian GDP. According to Moody's, therefore, the peninsula's economy will contract between 2,5% and 1,5% in 2012 and between 1% and zero growth in 2013.
