Europe's GDP: Going Down

ByJohn S. McClenahen In the wake of France's and Germany's poorer-than-expected GDP growth numbers for this year's first calendar quarter, the London-based European Economics unit of UBS Warburg has revised downward its projected growth rates for the 12-nation "eurozone." UBS Warburg now projects just 2% collective GDP growth for the dozen European countries now using the euro; the previous forecast was for 2.4% growth. Germany is the main culprit, with its GDP growth for 2001 now expected to be only 1.3%, down seven-tenths of a percentage point from the earlier forecast of 2% growth. "The [German] consumer has gone on an unexpected buyer's strike, caused by higher-than-expected energy and food prices, increased indirect taxes, and a stagnant labor market," relates UBS Warburg.