RTTNews - Eurozone real gross domestic product or GDP will contract between 5.1% and 4.1% in 2009, ECB President Jean-Claude Trichet said citing the June 2009 Eurosystem staff macroeconomic projections. GDP growth would be between negative 1% and positive 0.4% in 2010, he added.
Trichet said compared with the March 2009 ECB staff macroeconomic projections, the ranges have been revised downwards, in particular for 2009.
In March 2009 projections, the ECB staff has forecast the economy to contract between 3.2% and 2.2% in 2009. For 2010, economic growth was forecast between -0.7% and +0.7%.
A substantial negative carry-over effect from the previous year and the very weak result for the first quarter of 2009 significantly contributed to this downward revision, Trichet said.
The projected gradual recovery next year, with rates of growth returning to positive levels by mid-2010, reflects the effects of the significant macroeconomic stimulus under way. He said it also reflects measures taken so far to restore the functioning of the financial system both inside and outside the euro area.
With regard to inflation, staff project the rate to range between 0.1% and 0.5% in 2009, revised slightly downwards from between 0.1% and 0.7% said in March. For 2010, Eurosystem staff project annual HICP inflation to range between 0.6% and 1.4%, broadly unchanged from the March 2009 ECB staff projections.
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