Eurozone: Q&A on the risk of a double-dip recession

- "We provide a brief assessment of the risk of double-dip recession in the eurozone. Neither the slowdown in global growth nor the fading of the boost from the inventory cycle should be enough to derail the (moderate) recovery. Fiscal tightening is likely to prove manageable as well."
- "Significant currency depreciation is acting as an automatic stabilizer and will help overcome some of the headwinds that the eurozone will face in the coming quarters. Disorderly moves in financial markets pose the most serious challenge to our moderate recovery story."
- "We see a 10% probability of a double-dip recession, which is the same probability that we assign to a best-case scenario of growth significantly exceeding our current GDP forecasts of 1% for 2010 and 1.3% for 2011. From a timing perspective, the risk of recession is highest between the end of this year and the beginning of 2011."
Unicredit Economics Special 20100707

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