Europe’s top economics institutes say Eurozone GDP to fall 0.4% in 2009; Modest growth in 2010; ECB to cut rates to 2% by May; Recommend urgent recapitalisation of banks
Nov 24th, 2008 | By Finfacts Ireland Business & Finance Portal | Category: News worldwide
Europe's top economics institutes say today that GDP in the Eurozone will fall by 0.4% in 2009 with very modest growth of +0.5% anticipated for 2010. The ECB is forecast to cut its benchmark rate to 2% within the next 6 months - - by May 2009. The Institutes recommend urgent recapitalisation of banks in Europe and the US. The group says that a small permanent increase in the risk premium, and a consequential increase in the longterm cost of capital, could reduce the level of GDP in the US and the UK in the longterm by around one per cent. The impact on the Eurozone would be less negative.