Growth will come back before 2010

"The measures to stabilise the financial market, the easing of monetary policies and the economic recovery plans will enable us to put a floor under the deterioration of the economy this year and create the conditions for a gradual recovery in the second part of 2009. The top priority is to make those measures work effectively: to improve the flows of credit at reasonable prices and to implement the fiscal stimulus packages quickly to stimulate investment and private consumption. To boost confidence, it is also crucial that Member States explicitly commit that they will reverse the deterioration of public finances as soon as we return to normal economic times so as to ensure the medium-to-long term sustainability of public finances", said Joaquín Almunia, economic and monetary affairs commissioner.

Economic growth is forecast to have dropped to about 1% in 2008 in both the EU and the euro area, from just below 3% in 2007, according to the EU’s advanced interim forecast. In 2009, real GDP is expected to fall sharply, by 1.8% in the EU and 1.9 in the euro area, before recovering in 2010. Starting in the second half of 2009, global growth is expected to rise gradually but moderately as the financial market situation improves and the impact of the macroeconomic policy easing (not least in the US) gains traction. Overall, global GDP growth is expected to be around 2¾% in 2010.