S&P also cut its estimate for 2013, forecasting that the eurozone economy would grow only 0.4%, down from 1.0% previously.
In its report "The Curse Of The Three Ds: Triple Deleveraging Drags Europe Deeper Into Recession", S&P says the deleveraging process underway in Europe's public, household and banking sectors is dragging Europe deeper into recession and will take several more years to complete. S&P also says there is a 40% chance of a eurozone double-dip recession in 2013.
Regarding Spain, the rating agency forecasts the Spanish GDP will contract by 1.7% this year, while it will fall 0.6% in 2013, deeper into recession than previously estimated by S&P, 1.5% and 0.5% respectively.
Forecast cuts also affected France and the United Kingdom. For the UK, S&P said it had revised its 2012 estimate to 0.3% GDP growth this year, while GDP growth in France will be just 0.3% in 2012 and 0.7% in 2013, compared with 0.5% and 1%, respectively in its previous forecast.