Europe bank optimistic over eurozone debt
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LONDON, Jan 21 AFP
January 21 2013, 10:25PM
The European Bank for Reconstruction and Development (EBRD) has expressed optimism that the worst of the eurozone debt crisis is over, but trimmed its 2013 growth forecast for the ex-Soviet bloc.
The EBRD cut the growth forecast for the countries where it operates to 3.1 per cent this year, the London-based institution announced on Monday in its latest economic outlook.
That compared with the previous estimate in October of 3.2 per cent gross domestic product (GDP) growth.
"Downside risks to the outlook have continued to recede as the likelihood of further deterioration of the eurozone crisis diminishes," the EBRD said in the report.
"Growth in the transition region continued to slow down in the third quarter of 2012, but the deceleration is showing signs of bottoming out."
The economies in the EBRD's investment zone shrank by 2.6 per cent last year, hit by fallout from the long-running eurozone sovereign debt crisis, after impressive expansion of 4.6 per cent in 2011.
"For the first time in a long while we are now seeing the possibility of a reduction in the risks facing emerging Europe, especially the risks from the eurozone," said EBRD chief economist Erik Berglof.
"It is too early to sound the all-clear but there are signs of stabilisation," Berglof added.
The EBRD was formed in 1991 to help former Soviet bloc countries switch to a market economy, and invests alongside private-sector firms.
It agreed earlier last year to expand its reach into emerging Arab democracies.
In May, it approved the pumping of one billion euros ($A1.15 billion) into nations in the Middle East and North Africa region, at the lender's annual meeting.
At the same time, the group appointed its first British president, veteran civil servant Suma Chakrabarti.