The euro zone is emerging from recession, the European Commission believes but its latest forecast for the year remains gloomy.
The Commission’s economists feel the region’s economy will likely contract by four percent for the whole of this year – the same as their last forecast which was made in May – but they now expect it to expand in both the third and fourth quarter. EU Monetary Affairs Commissioner Joaquin Almunia remained cautious: “I have to say that this more optimistic evolution of the GDP across the year 2009 is accompanied by a lot of uncertainty. We know that parts of these improvements are due to policy-driven measures and factors.” Almunia was referring to the “unprecedented” amounts of money pumped into the economy by central banks and governments. At the same time new data showed job losses across the region still rising so reducing growth; and factory output in July was down by nearly 16 percent compared with last year but that was an improvement on previous months.