Gross domestic product will expand 2.8 percent this year and 1.4 percent in 2012, Aktia said, cutting its forecasts from 3.8 percent and 2.4 percent respectively. The likelihood of a recession in Europe is “high” at 40 percent, Chief Economist Timo Tyrvaeinen wrote in an e-mailed report today.
“If the debt crisis becomes unmanageable, we’re headed for a banking crisis,” Tyrvaeinen said. “A recession caused by freezing credit markets and lack of confidence will most likely be deep.”
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