The EU finally owned up to what everyone already knew. It will face its first recession since it was formed over ten years ago. It was nothing more than a fantasy that it could dodge the fates of the US and UK.
The forecasting arm of the European Commission said GDP within the region would drop at 1.9% this year. The number seems optimistic.
According to Bloomberg, “The overall outlook is grim,” European Union Monetary Affairs Commissioner Joaquin Almunia told reporters in Brussels today. “In 2009, we are forecasting negative growth for 11 out of the 16 euro-area members.”
The news from the EU actually sends ripples all the way around to the other side of the world. The regions to which China exports most of its goods have now all officially said the 2009 will be a year of economic contraction. Japan admitted its troubled some time ago, The UK and US have seen the light in the last 60 days.
China can no longer count on any substantial part of the consuming world to exhibit an increased demand for the products that its factories send out around the globe. That makes it near certain that the world’s most populated nation faces negative GDP before the end of the year.
Douglas A. McIntyre