The impetus to growth from foreign trade will ease markedly in the coming months given the strength of the euro and the less dynamic world economy. An appreciable and sustained pickup in aggregate demand is not on the cards until the fourth quarter. In 2008 real economic growth is set to come in at 1.8 %. For 2009 we expect economic growth of 2.2 %, with more than half actually coming from private consumption.
Economic forecast 2008/2009
In early 2008 the world economy and above all the international financial markets are in the shadow of the US property crisis. We do not expect to see any decisive impetus coming from either the USA or Japan. However, thanks to continued strong momentum in the emerging markets the world economy is likely to record (GDP-weighted) growth of just under 3 %. In 2009 global GDP growth will move back well above the 3 % mark. We put world trade growth at 5 to 6 % in 2008 and 6 to 7 % in 2009. Apart from this base scenario, although not very likely it cannot be ruled out that the US economy will slide into a longer and deeper recession and the financial market crisis will worsen. In this event economic growth in large parts of Europe would shudder to a halt.
In the euro area the economy had already lost substantial momentum in the fourth quarter of 2007. With the pace of expansion expected to remain weak in the first half of 2008, we expect to see full-year EMU growth of 1.8 %, accelerating slightly to 2 % in 2009. Private consumption is likely to continue to provide support. After an increase of 1.7 % last year, employment growth in 2008 is likely to be half a percentage point lower. However, the unemployment rate will probably drop further below its current level of 7.1 %