Press Release: Interim forecasts for 2009-2010: slowdown sharpens but growth will come back before the end of 2009

GDP growth in the European Union is expected to fall by 1.8 % in 2009 before recovering moderately to 0.5% in 2010. This is the result of the impact on the real economy of the intensified financial crisis, the ensuing global downturn manifested in the severe contraction of world trade and manufacturing output and, in some countries, housing-market corrections. Government consumption and public investment, however, will provide relief. The fact that inflationary pressures have eased also contributes to private consumption. The discretionary fiscal measures announced since August 2008 will limit the contraction in GDP growth by about ¾ pp. this year. The severity of the economic downturn will have a significant impact on employment and public finances over the forecast horizon.