Extracts from the press conference by Joaquín Almunia on the economic forecast 2008-2009
Type: Summary of press conference
End production: 10/09/2008 First transmission: 10/09/2008
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.
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Exterior view of the European Commission building
||General view of the press conference
||Joaquín Almunia, Member of the EC in charge of Economic and Monetary Affairs, saying (in ENGLISH) that they know that the financial turmoil continues; that they know that oil and other commodity prices are still high, even if in both cases -oil and other commodities- during the last weeks prices are going down; that oil prices are below 100 dollars per barrel; that they take into account for EU and euro area forecasts that the global economy probably will slow down, not only when they compare 2008 and 2007, but also in the second part of 2008; that they know that output GDP growth contracted in some EU economies are more than they expected in the last forecast exercise in the spring; that they know that business and consumer confidences have declined significantly.
||Cutaways of press (2 shots)
||Joaquín Almunia saying (in ENGLISH) on inflation, that they expect 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, in quarterly terms; that if they are talking in monthly terms, he hopes that this Eurostat flash of 3.8% inflation in the euro area at the end of August will be confirmed in a few days and he hopes that in September this gradual deceleration of inflation will continue; that this will allow them to confirm the quarterly figure for the third quarter and to start the downwards process of adjusting inflation from the fourth quarter of 2008 onwards; that these forecasts are only referring to 2008; that they will see in November in their next forecast exercise what can be the consequences for 2009; that this implies that the volatility in oil and other commodity markets will not provoke again increases, as they knew in the past months, in the first part of this year; that they we cannot exclude this unfortunately; that they also consider that second-round effects that so far have been very very anecdotic will be avoided in the coming time.
||Joaquín Almunia saying (in ENGLISH) on the question of possible recession of the European economies, that with this forecast, they are recognizing that the financial turmoil and the external shocks have provoked in the European economies a sharper than expected slowdown; that this is their assessment.