EU economy hit hard by global downturn

Published: 20 January 2009 y., Tuesday

Kritimas
The Commission estimates that economic growth fell to about 1% in 2008 in both the EU and the eurozone (down from just below 3% in 2007). The latest forecast projects that real GDP will contract by almost 2% in both regions in 2009, before growing again by about 0.5% in 2010. These figures are lower than the autumn forecast.

With the EU economy expected to shed some 3.5m jobs this year, unemployment is set to rise. The rate is forecast to reach 8¾% in the EU in 2009 (9¼% in the eurozone), with a further increase in 2010.

Public finances will be hit, too. The headline deficit for EU countries – a raw measure of budget shortfalls – is expected to more than double this year, from 2% of GDP in 2008 to 4½ % in 2009 (from 1¾ % to 4% in the eurozone). As a result, several EU countries are projected to breach or stay over the EU deficit cap of 3% of GDP. A further worsening of the budgetary outlook is expected for 2010.

On the positive side, inflationary pressures are abating rapidly amid faltering commodity prices. Consumer-price inflation is now expected to fall – from 3.7% in 2008 in the EU (3.3% in the eurozone) to about 1% in 2009 and just below 2% in 2010 (both EU and eurozone).

The Commission usually publishes economic forecasts four times a year – comprehensive spring and autumn forecasts and smaller interim forecasts in February and September. But in light of the sharp economic slowdown, the current interim forecast has been expanded. Covering all EU countries, it includes more variables than usual and the full two-year forecast horizon. The next full-fledged forecast will come out on 4 May 2009.

 

Šaltinis: ec.europa.eu
Copying, publishing, announcing any information from the News.lt portal without written permission of News.lt editorial office is prohibited.

Facebook Comments

New comment


Captcha

Associated articles

The most popular articles

Putin reassures Russia on economy

Vladimir Putin appeared on live television and radio for his annual question-and answer session with the public. more »

EUFISERV Payments, ATM Scheme comply with SEPA; separate from processing biz in Europe

EUFISERV Payments announced today that the separation of the EUFISERV ATM Scheme from EUFISERV's former processing business is now complete, and is in line with the SEPA requirements of the European Central Bank and the European Commission. more »

Detroit impacts Mexico's economy

600,000 Mexicans work in the auto and auto parts industries, and U.S. automakers run around a dozen plants. more »

Time for Britain to join euro?

The President of the European Commission Jose Barroso says some British politicians are considering signing up to the euro more »

U.S. officially in a recession

It's official. The U.S. economy is in a recession. more »

Credit crunch – the EU at work

The crisis that started in the US over a year ago has sent shock waves around the globe. more »

Kick-starting the economy

Offering a coordinated response to the EU’s deepening economic crisis, the Commission is proposing €200bn in measures to boost purchasing power and generate growth and jobs. more »

UK promises billions in stimulus

The two men charged with keeping Britain's economy afloat moved on Monday to ward off a deepening recession. more »

An aging Europe - MEPs call for social security reform

European citizens are getting older and greyer. By 2050 it is estimated that the average age in the European Union will be 49, up from 39 now. more »

Obama's economic stimulus plan

Addressing U.S citizens, Barack Obama spoke of plans to revive the economy. more »