Europe to avoid recession despite slowdown - S&P

26 February 2008 13:49  [Source: ICIS news]

LONDON (ICIS news)--Europe should escape a genuine recession despite mounting evidence of a regional economic slowdown, rating agency Standard & Poor’s said on Tuesday.

 

Chemical companies have said they are expecting slower growth later this year but earlier in the month were not reporting any major impact on demand from the US economic slowdown and global credit crisis.

 

Key producers such as BASF and Lanxess have said their order books are full.

 

“When asset prices fall and the economic environment becomes more volatile, households typically tend to increase their precautionary savings, especially when these are deemed low,” said S&P chief European economist Jean-Michel Six in a report.

 

Six added consumers response to falling asset prices, higher inflation and unemployment levels will determine how great the slow down is and how long it will last.

 

The S&P report added that German households had the greatest spending power and were one of the best nations for saving, while UK households were second in terms of spending power but had fast declining rates of saving.

By: Lucy Craymer
+44 20 8652 3214

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