BNP Paribas Lowers Euroland Growth Estimate

ByJohn S. McClenahen The year 2003 is less than three months old, and economists around the world are revising their growth projections, mainly lowering them. A case in point: BNP Paribas SA, a Paris-based financial firm, has just lowered to 0.8% from 1.2% its GDP growth forecast for the 12 European Union countries that use the euro as their currency. "Market consensus expectations -- currently at 1.5% for 2003 -- remain way too optimistic in our view," says London-based Ken Wattret, BNP Paribas' chief Euroland market economist. "Recovery is still forecast for the second half of the year, as waning uncertainty and declining inflation should give a boost to consumer demand," he says. "Risks, however, remain skewed to the downside, given geopolitical concerns [a war against Iraq], the resurgence of the euro [against the U.S. dollar], and fragile business and consumer confidence."