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A cautiously optimistic outlook for European and US growth emerges from Euromoney's latest poll of economists. The imprecision of judgements on the strength of the US recovery over the next year as well as the resilience of the EU consumer in the face of a possible gradual rise in unemployment make these forecasts highly provisional.
In Europe the value of the euro has fallen by over 10% since its launch, adding to consumer price inflation and squeezing real household incomes. Average growth continues to be relatively slow in 2002 in all the major eurozone economies. Growth estimates for Germany (7) have been reduced to 1% for 2002 but move back towards the Euroland average in 2003. Germany is particularly vulnerable to the slowdown in world trade growth, which is expected to continue during the first half of 2002. Other major Euroland economies are expected to grow more rapidly than Germany in 2002, with growth in France (13), Spain (18) and the Netherlands (6) getting back to 2.5% to 3%.
Prospects for candidate EU countries rest on the benefits of continued but slowing Russian growth relative to the losses from the slowdown in EU-related trade.