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“Global growth prospects for this year and next have weakened slightly since early May. This is partly due to further signs of a significant slowing in a number of key emerging market economies, particularly China,” an NIESR press release said on Friday.
But activity has also been somewhat weaker than assumed in some advanced economies, including the United States.
Dawn Holland, the NIESR principal research fellow behind the report, says that Italy, Spain, Portugal, and Ireland, Netherlands, France and Slovenia face further decline.
“The Euro area continues to be the area that lags most behind the rest of the world and is forecast to remain in recession this year,” Holland said at a press conference in London.
Her remarks came as the European Union’s Statistical Agency (EUROSTAT) announced in a report that unemployment figures had dipped or stabilised in some countries but that overall job recovery was happening at a very slow pace.
“Among the Member States, the lowest unemployment rates were recorded in Austria (4.6 per cent), Germany (5.4 per cent) and Luxembourg (5.7 per cent), and the highest in Greece (26.9 per cent in April 2013) and Spain (26.3 per cent),” the report said.
The average unemployment rate for the 17-member eurozone is 12.1 per cent, roughly 19.4 million people.
The drawbacks in global economic recovery are also partially due to monetary policies of developed nations.
“Since May there has been a significant increase in volatility in global financial markets arising mainly from speculation about the timing of the normalisation of monetary policy in the United States, but also from uncertainty about whether Japan’s new policies will work and from action by China’s authorities to restrict credit growth,” the NIESR report said.