London - Xinhua
Europe should be able to escape a double-dip recession, despite the slowdown in GDP growth in most European countries in the second quarter of 2011, rating agency Standard & Poor\'s said on Tuesday. \"We continue to believe that a genuine double dip will be avoided because we see several sources of continuing growth over the next 18 months, including still buoyant demand from emerging markets and an ongoing recovery, albeit sluggish, in corporate capital spending,\" said Jean-Michel Six, Standard & Poor\'s chief economist for Europe. \"Nevertheless, we recognize that downside risks are significant. In particular, we will closely monitor trends in consumer demand over the coming quarters,\" he said. In its latest forecast report, S&P said consumer demand could stay modestly supportive of economic growth over the coming months, at least from relatively low-leveraged households in parts of the eurozone. Still, high unemployment and the recent significant decline in equity markets posed significant downside risks to spending, it said. The rating agency cut its GDP growth forecast for the eurozone to 1.7 percent in 2011 and 1.5 percent in 2012, compared with 1.9 percent and 1.8 percent in its earlier forecast in July. Germany, the European Union\'s largest economy, is expected to see a GDP growth rate of 2.0 in 2012, down from previous prediction of 2.5-percent, whilst the UK is expected to register a GDP growth rate of 1.3 percent in 2011 and 1.8 percent in 2012, down from 1.5 percent and 2.0 percent respectively.