Extracts from the press conference by Olli Rehn on the interim economic forecast

Type: Summary of press conference   Reference: I-072445   Duration: 10:03:46  Lieu:
End production: 23/02/2012   First transmission: 23/02/2012
On 23 February 2012, Olli Rehn, Vice-President of the EC in charge of Economic and Monetary Affairs and the Euro, presented the interim forecast which shows euro area in mild recession with signs of stabilisation. The unexpected stalling of the recovery in late 2011 is set to extend into the first two quarters of 2012. However, modest growth is predicted to return in the second half of the year. On an annual basis, real GDP in 2012 is now forecast to remain unchanged in the EU (0.0%) and to contract by 0.3% in the euro area. Uncertainty remains high and developments across countries are uneven. The inflation forecast for 2012 has been revised slightly upwards compared with the autumn, due to persistently high energy prices and increases in indirect taxes. It now stands at 2.3% in the EU and 2.1% in the euro area.

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10:00:00 Title 00:00:05
10:00:05 General view of the conference room 00:00:05
10:00:10 Soundbite by Olli Rehn, Vice-President of the EC in charge of Economic and Monetary Affairs and the Euro (in ENGLISH): You can see the loss of growth momentum in the EU towards the end of 2011. In the final quarter of 2011, according to Eurostat's Flash estimate, GDP contracted by 0.3% from the previous quarter in both the euro area and the EU. This weakness will carry through to the first quarter of this year, while we expect growth to resume in the second half of this year. On an annual basis for 2012, GDP growth is now forecast at 0.0% in the EU and -0.3% in the euro area. This is a downward revision of 0.6 pp. and 0.8 pp. respectively compared to the November forecast. 00:01:09
10:01:20 Cutaway of the Interpreters box 00:00:05
10:01:26 Soundbite by Olli Rehn (in ENGLISH): On the back of persistently high energy prices, core inflation has been stabilising at about 2% and headline HICP inflation has decreased only gradually. Recent increases of indirect taxes have also contributed to this picture. Given the weakening picture on GDP growth, inflation is expected to trend on a slowly decreasing path over the forecast horizon. 00:00:44
10:02:10 Cutaway of the audience 00:00:06
10:02:17 Soundbite by Olli Rehn (in ENGLISH): It is essential that Europe continues to take decisive actions in line with our comprehensive crisis response which we called "Roadmap for stability and growth" in October. And in fact we have recently taken very significant steps to implement this comprehensive response while we have to continue the implementation of this policy. 00:00:32
10:02:50 Cutaway of the audience 00:00:05
10:02:56 Soundbite by Olli Rehn (in ENGLISH): First, uncertainty about a second programme for Greece has been removed. Next months are now critical in implementation. Second, good, but not yet sufficient, progress has been made to establish an adequate firewall against contagion in sovereign-debt markets. Third, a better capitalisation of EU banks is well underway and funding stress has eased. 00:00:50
10:03:46 General view of the conference room 00:00:06
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