European Commission:
Autumn 2009 Economic Forecasts
Overview:
The latest set of European Commission (EC) Economic Forecasts brings some positive news: an upgrade to the growth outlook. The EU is now expected to grow by 0.7% y-o-y in 2010 rather than contract by 0.1% as forecast in the Spring Report. However, the Report also underlines the lasting impact that the crisis will have on unemployment, fiscal balances and government debt to GDP ratios. The economic recovery is likely to prove long and painful with growth below trend and a significant period of fiscal retrenchment ahead. In Eastern Europe, Hungary has noticeably improved its fiscal deficit (now below the EU average) but still has a very high debt ratio. The Czech Republic and Poland must rein in recent fiscal slippage. Elsewhere, Bulgaria and Estonia have maintained fiscal discipline relatively well.