World economic crisis continues

In 2009, the global economy is likely to contract, owing to the financial crisis and the impact it is having on the real economy. However, the measures initiated by numerous countries to reinvigorate the economy and support banks have laid an initial foundation for alleviating the confidence Glossary crisis. The situation in the Eurozone will probably remain difficult throughout the year. Based on current forecasts, which have a great element of uncertainty, the Eurozone’s real gross domestic product (GDP) will decline by some 2 %. Estimates for the German economy are of the same order. Investment in property, plant and equipment is set to decline significantly. Foreign trade–traditionally the engine of Germany’s economy–cannot be expected to provide support since exports will also fall far below last year’s level. The UK economy has been especially hard hit by the financial crisis and is still trying to cope with weakness in the property sector. UK economic output might drop by as much as 3 % in 2009. In common with the Eurozone, the UK economy is not expected to recover before 2010. The implications of the financial crisis and shrinking global demand are being felt increasingly in Central Eastern Europe as well, though the region as a whole is still expected to post marginal growth.