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Outlook for euro zone's strugglers worsens again

Published on Jan 17, 2013 6:19 AM

LONDON (REUTERS) - Spain, Greece and Portugal face a tougher 2013 than previously thought, while the outlook for growth in Ireland, the only bright spot among the euro zone's most vulnerable economies, was cut for the first time in nearly a year.

A Reuters poll of 46 economists published on Wednesday showed austerity has caused the southern economies to shrink far more than authorities predicted but will only lead to slow fiscal improvement and unemployment will keep rising.

The outlook for Spain, Portugal and Greece has worsened in almost every quarterly poll since the first one was conducted in June 2011. The forecast for Irish growth was cut for the first time since April 2012.

The gloom is incongruous with optimism in financial markets that started when European Central Bank President Mario Draghi promised in July to do "whatever it takes" to preserve the euro.

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