Goldman Sachs forecasts euro-zone recession (by Simon Kennedy)

LONDON (MarketWatch) -- Goldman Sachs on Tuesday cut its forecast for global growth in 2012 and said it now expects the euro zone to sink into a "mild" recession. The broker said its global growth forecast has been cut to 3.5% in 2012 from 4.2% and that euro-zone growth in the same year is now expected to be 0.1%, compared to its prior forecast of 1.2%. The euro zone is likely to fall into recession in the fourth quarter of 2011 and the first quarter of 2012, with a 0.1% quarter-on-quarter contraction in both those periods. "The uncertainty around these forecasts is substantial, largely hinging on the progress of credible solutions to the euro zone's funding problems," Goldman Sachs said.