Extracts from the press conference by Joaquín Almunia on the economic forecast 2008-2009
During a press conference, Joaquín Almunia, Member of the EC in charge of Economic and Monetary Affairs, presented the European interim economic forecasts for 2008.
The European Commission cut its 2008 euro area growth estimate to 1.3 per cent from 1.7 per cent previously. Asked about risks of recession in some European economies, the Commissioner only recognized that the financial turmoil and the external shocks have provoked in the European economies a sharper than expected slowdown.
But after the euro area economies contracted 0.2 per cent in the second quarter, the Commission predicted it would stall in the third quarter and expand only 0.1 per cent in the final three months. On inflation, the Commission expects that the impact of the price shocks coming from oil markets and commodity markets will start to have positive consequences in the deceleration of inflation in the last part of this year, during the fourth quarter of this year.
If the forecast bears out, it would mean that the euro area could be spared a recession, which economists define as two consecutive quarters of contracting economic activity. PHOTOSHOTLISTLINK