Investment bank Goldman Sachs expects significant recession late 2011 and in early 2012 in the eurozone, said Jan Hatzius, Goldman Sachs' Chief Economist (in picture). “We expect declines in real GDP across the euro area of 2 percent for the next couple of quarters, with deeper declines than that in the southern part – Greece, Italy, Spain,” he also said. The investment bank forecasts milder recession in the core countries of the eurozone. Germany's economy will most likely contract for a couple of quarters as well, not by as much, as fundamentally the German economy is quite strong, Hatzius believes. “But there will be spillover from the weakness in the southern part,” he continues.

Non-eurozone countries will be affected by this spillover effect too. Countries like UK, Scandinavian countries and Central and Eastern European countries will see economic contractions, even though not as deep as in other parts of Europe, insider the eurozone.

For the world economy as a whole, Goldman Sachs' forecast for real GDP growth in 2012 is 3.2 percent, while for 2013, 4.1 percent. The bank also expects a slowdown of growth in the US, but not a recession.

The full forecast here.

editor@romania-insider.com