Global Insight Lowers Europe Forecast

ByJohn S. McClenahen The likelihood of a war with Iraq, higher oil prices, weakness in equity markets, a strong euro and overly restrictive fiscal and monetary policies are causing Global Insights Inc., a Waltham, Mass.-based economic forecasting firm, to scale down its 2003 growth projection for Western Europe. GDP growth for the eurozone, the 12 countries that have the euro as their currency, is expected to be a mere 1.4% in 2003, following an even weaker 0.7% last year. Depressed consumer and business confidence "will limit personal expenditures and is set to lead to further declines in business investment during the early months of this year," says Howard Archer, Global Insight's managing director of European macroeconomics.