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Europe's economy may not meet already low expectations: economist

11-24-2011 09:14 BJT

SINGAPORE, Nov. 23 (Xinhua) -- The global economy will get off to a disappointing start next year and the euro zone will probably not even meet analysts' already low expectations, said Jorg Zeuner, the chief economist of VP Bank on Wednesday.

Speaking at a press conference in Singapore, Zeuner said the situation will start to improve only in the second half of 2012, but it would be too late for noteworthy full-year gains.

Negative growth rates will prevail in the first half of the year for Europe and the lack of confidence in the crisis management skills of the European governments is depressing the mood in the real economy as well as in the financial markets, he said.

How the euro zone's members will change will become clear only in the second half of 2012, too, he added.

European banks are in the process of further consolidating their balance sheets. Further major labour market adjustments lie ahead for many euro countries, and they will have to accept lower real wages if they wish to stay in the euro.

Zeuner said the domestic demand in Asia will help the countries in the region achieve soft landing.

Investors should concentrate on corporate bonds in all rating segments. The international equity markets will recover only after the anticipated, determined intervention of the European Central Bank, he said.

Editor:Wang Xiaomei |Source: Xinhua

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