Euro Zone Seen in Recession Second Straight Year

Global economic growth in 2013 will be weaker than previously forecast, with Europe heading for recession for the second consecutive year, amid political tensions and lingering effects of the 2008-09 financial crisis, the Economist Intelligence Unit said.

Worldwide, Gross Domestic Product is projected to expand 2.3% next year, down from 2.5% in a previous estimate and only a slight improvement from the 2.2% growth expected this year, Economist Intelligence Unit analysts said in a new report.

"Such a subdued rate of growth is exceptionally disappointing at this stage of an economic recovery, and underlines the fact that the world has not recovered fully from the 2008-09 financial crisis," the Economist Intelligence Unit said.

The group also forecast the euro zone economy will contract by 0.2%, after previously saying the region would grow 0.4%. Overall, trading conditions "remain difficult in many countries," and while China and the U.S. offer some bright spots, "the global economy still has serious problems - most notably the debt crisis in the euro zone… Austerity looks set to bite harder than we previously forecast."

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