EU economy set to fall 4% in 2009

• Source: Xinhua
• [08:15 November 04 2009]
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European Commission's autumn forecast for 2009-2001 showed on Tuesday that the EU economy is set to fall by 4 percent in 2009, expected to grow by 0.75 percent in 2010 and 1.5 percent in 2011.

The forecast projected that the economy of the 27-nation bloc "is on the road to a gradual recovery" and "will emerge from recession in the second half of this year, although for 2009 as a whole, GDP (gross domestic product) is still set to fall by some 4 percent."

"A gradual recovery is expected with GDP forecast to grow by 0.75 percent in 2010 and around 1.5 percent in 2011," it said.

It said that the near-term rebound in activity followed from improvements in the external environment and financial conditions, as well as from the significant fiscal and monetary policy measures put in place.

"Further out, a number of factors are set to restrain private demand and thus, the strength of the recovery," the report said, "In particular, labor-market conditions will remain weak, with the unemployment rate projected to reach 10.25 percent in the EU."

The public deficit "is also expected to rise, to 7.5 percent of GDP in 2010, before falling back slightly in 2011 as the economy picks up and temporary measures gradually come to an end," said the forecast report.