Wednesday, the Fitch Ratings forecasts a severe and abrupt recession in Emerging Europe in 2009. Gross Domestic Product is expected to shrink 3.1% this year compared to a 4% growth in 2008 and an average of 6.8% in the five years to 2007.

The Fitch Ratings forecasts the Emerging Europe to suffer its steepest decrease in real GDP since the collapse of the Communist planned economic system in the early 1990s.

Edward Parker, Head of Emerging Europe Sovereigns at Fitch, Moreover, it expects only a modest recovery of 1.4% in 2010, insufficient to prevent further rises in unemployment and pressure on public finances. The rating agency predicts growth in Emerging Europe to fall more than in other regions.

Since August 2008, the agency has downgraded the sovereign ratings of 10 nations in Emerging Europe, by a total of 14 notches. Ten countries are now on Negative Outlooks and none on Positive Outlooks.

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