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Euro solution won’t boost growth in near term, says thinktank

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A solution to the European debt crisis will not be enough to turn around global economic performance, at least for the next few years, according to a report by thinktank the Centre for Economic and Business Research (CEBR).

The report concluded that the world economy will remain weak until at least 2016, even if there is an end to crises in the Middle East and Europe.

In the latest quarterly edition of Global Prospects, CEBR also points to the risks and consequences of an Israeli attack on Iran and the likely damaging effects of a eurozone break-up.

Forecast annual global growth for 2013 has been cut to just 2.7% from a previous estimate of 3.2%. Growth for the 2014-16 period has been revised down to 3.2% from 3.5%.

North America will do better than Europe, with GDP growth in 2013 put at 1.7% for the US and 2.1% for Canada, the CEBR said.

Many emerging economies are likely to see much weaker growth than before, slowing in China to about 7% by 2016, it added.

It comes as GDP data from Greece showed its economy shrank by 6.2% in the second quarter of 2012, on a year-on-year basis. That is a slight improvement on the first quarter, when the economy contracted by 6.5%.

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