British Company Forecasts Drop in GDP of Eurozone while Increase in Unemployment Rate

Business Materials 24 November 2008 16:32 (UTC +04:00)

Azerbaijan, Baku, November 24/ Trend corr A. Badalova/ The British Capital Economics Macroeconomic Research Consultancy forecasts drop in Eurozone GDP by 1% in 2009 at an annualized pace.

In Q3 of 2008, Eurozone GDP dropped by 0.2% which points to onset of recession in the region.

According to the forecast of the British company, this indicator will remain the same in the Q4 of 2008. Capital Economics forecasts rise in GDP by 1% in 2008.

On the background of recession in the region and fall in crude prices, inflation in the Eurozone came to naught in October. The annual inflation made up 3.2% in last month as compared to 3.6% in September. A year ago inflation in Eurozone made up 2.6%. 

According to report by Capital Economics, if prices of energy sources keep less susceptible to dynamics of oil prices for the coming several months, drop in index of consumer prices will not be significant. Analysts of the company forecast drop in prices of energy sources in Eurozone by 8% as compared to summer of 2009.

According to the forecast of the British company, unemployment rate in Eurozone increase from 7.5% in 2008 to 9.3% in 2009. The maximum rate of unemployment will take place in the Q4 of 2009- 9.9%.

Analysts forecast, the total index of confidence to economy of Eurozone will fall from 80.4 in October to 78 points in November. The summary indicator of rate of confidence to Eurozone economy made up 87.5 points.

As a whole, economic recession in Eurozone will be less significant than in US and the United Kingdom.

In 2009, Capital Economics forecasts slow down in euro rate as compared to dollar by 0.4% to $1.20 as compared to $1.25 in 2008.

The correspondent can be contacted at: [email protected]