1. The “status” of the Crisis in Europe A General Outlook
Bratislava June 2009
With the support of

2. The formation of Gross Domestic Product
On annual basis, the GDP decline is sharp (- 4,7%) and it is still accelerating (-2,4% vs. -1,7 of previous quarter).
Forecasts for Q are negative. Possibly bottom not yet reached despite some positive hints.
Decreasing Investments provide a major contribution to the decline while consumption remains on sustainable levels.

3. Inputs and prices
Inflation is decreasing and very low, the external trade balance is decreasing due to the oil price trend and the revalution of the Euro which lower the costs of inputs. Should the European economies refocus on the domestic market? Unemployment is increasing but expectations are for further and deeper cuts.

4. Industry
Despite the gloomy figures on industrial production (-18,98%) and industrial orders (-25,41 % but … improving) the positive note comes from the “economic sentiment” which signals a more optimistic attitude of entrepreneurs.

5. GDP in relevant countries
The most manufacturing exporting countries (Germany, Italy, Romania) are currently paying the higher price of recession.
However in the medium-long term they might be in a better position for recovery since the recovery will restart from the “real” sectors.

6. Consumption in relevant countries
The robust welfare system of Germany and France is protecting the national consumer.
In Italy figures are slightly worse but Italian families can rely on a robust assets situation consisting of real estate property and very low debts.
Bulgaria and Romania seem less resilient.

7. Unemployment in relevant countries
Spain is the worse off country. Forecasts are negative for the next future.

8. Industrial Production in relevant countries
Germany and Italy, the two manufacturing exporting economies in the EU, suffer the effects of the drop in global demand (but they might recover faster when international demand picks-up again).