Publications
New Forecast: Financial crisis threatens employment and growth - policy response needed
ELNEP forecast and economic policy recommendations, May 2008
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Executive summary (main report):
In spring 2008, the outlook for euro area growth is overshadowed by the ongoing financial crisis and the question of how deep the US recession might become. Financial distress worldwide is far from over and the necessary depreciations and write-offs in the banking sector will negatively impact the real economy. Weaker US and global expansion, combined with the appreciation of the euro against the US-dollar, will dampen euro area exports. At the same time, private consumption is impaired by rapid inflation primarily caused by unusually high prices for food and energy. The higher headline inflation rates will make the needed quick counteraction by policymakers, specifically a loosening of ECB monetary policy, less likely.
Forecast Update: Growth expected to moderate and increased downside risks
While euro area growth has been slightly more robust than projected in 2007, its prospects now look slightly weaker for 2008. This is due in part to rising oil prices, the impact of the current turmoil on financial markets and the strong appreciation of the euro against the US Dollar. ELNEP now expects GDP to expand by a rate of 2.5% instead of 2.2% for 2007 and 2.0% instead of 2.1% in 2008. Moreover the risks of a more serious economic downturn have increased. more...
Keeping the European recovery on track
ELNEP forecast and economic policy recommendations, April 2007
Executive summary
The ELNEP forecasts the strong economic growth in the euro area in 2006 (2.6%) to slow somewhat to 2.2% in 2007 and 2.1% in 2008. That will still be strong enough to reduce unemployment, but growth rates are coming down after just one year of high growth and a long period of virtual stagnation. This largely reflects external factors but also the German VAT increase, tighter monetary conditions and concerns about the sustainability of fast growth in some countries. more...