According to this Reuters report, the Slovenian Minister of European Affairs and Development Mitja Gaspari informed a news conference in Ljubljana yesterday (Thursday) that the latest OECD 2009 forecast for the eurozone is for a contraction of 4.1 percent. He also stated that the OECD figures show Germany’s economy will contract by 5.1 percent and Italy’s by 4.2 percent. While these figures are completely unofficial – official publication of the updated OECD forecast is due on March 31 – they do not seem at all unreasonable, although they are of course shocking. At think at this stage talk of a recovery in the second half of the year is completely premature, and the only real issue is whether 2010 will simply be more of the same, or will be a bit better (a eurozone contraction of say 2%).
The previous OECD forecast, issued on November 25, showed euro zone 2009 GDP down 0.6 percent, Germany down 0.8 percent and Italy down 1 percent. I think the current numbers are now in the right order of magnitude, and the debate will obviously be about what to expect for next year.
The IMF yesterday published an “update” eurozone forecast of a 3.2% 2009 contraction, but also reported it was still “working on its projections”.
Advanced economies will suffer deep recessions in 2009, the assessment said. Leading economies in the Group of Seven are expected to experience the sharpest contraction for these countries as a group in the post-war period by a significant margin (see table). The IMF said that in the fourth quarter of 2008 global GDP contracted by 5 percent at an annualized rate. The IMF is still working on its projections and will announce numbers for countries around the world on April 22.