Monday, the European Commission in its Spring Forecast projected a 4% contraction in European Union's GDP this year. However, the economy is expected to regain momentum in the course of 2010 with the impact of fiscal and monetary stimulus measures.

The euro area is also projected to shrink 4% in 2009 and to fall by a moderate 0.1% next year. The jobless rate is seen at 11.5% in 2010, up from an estimated 9.9% this year.

Regarding inflation, HICP inflation is projected to be slightly lower than 1% in the EU and 0.5% in the euro area in 2009, and to reach a trough in the third quarter in both regions.

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