Brussels, 11/11/2008 (Agence Europe) - “The financial crisis isn't over yet” and the real economy will continue to suffer from it, said Joaquin Almunia, European Commissioner for Economic and Financial Affairs, speaking to journalists in Brussels on Tuesday 11 November. “It is clear that 2009 and even 2010 will be difficult years”, he then confirmed during a conference organised by the Institute for Economic Research at the University of Munich (Ifo Brussels International Economic Forum). “There is a real risk that if the financial stress intensifies or lasts longer, it may have a greater effect on the economy”, he added, stressing the great uncertainty surrounding current forecasts.
Since the presentation of autumn economic forecasts on 3 November (EUROPE 9772), in which the Commission reckoned on growth of 1.2% in 2008 and 0.1% in 2009, other more worrying figures have been published by other organisations. At the end of last week, the International Monetary Fund (IMF) said developed countries would fall into recession next year with a 0.3% contraction of economic activity (a strong reduction compared to its previous forecasts). Like the United States (-0.7%) or Japan (-0.2%), the eurozone (-0.5%) will not be spared, the IMF says, predicting a fall of GDP of 0.8% in Germany, 0.5% in France and 1.3% in the United Kingdom.
While pessimism reigns for 2009, the impact of the crisis could also be more marked than thought in the very short term. The next estimates by Eurostat on GDP during the third quarter of 2008, to be published on Friday 14 November, will give a more exact idea of the current economic situation of the eurozone. After a 0.2% fall during the second quarter of the year, a further fall of GDP would mean recession (which is defined as a fall of GDP during two consecutive quarters). Economic climate indicators of the eurozone during the fourth quarter 2008, to be published by Ifo this week, will not be optimistic either. Hans-Werner Sinn, Head of Ifo, who was speaking on the sidelines of the conference, confirmed that the indices will be at their lowest levels ever reached. The assessment of the current situation and expectations for the next six months have sharply declined, he said. (A.B./transl.jl)