Welcome to Strategies and Cheese.
The appearance of my first post is fortunately aligned with some good news that just came out an hour ago.
According to the shortly released data the recession is Western Europe is already over in Q3 2009. A breath of fresh air. Seasonally adjusted GDP stats as well as industrial production show significant hikes compared to the previous quarter. Growth figures are: 0,4% p.q. for the euro area, 0,7% p.q. for Germany and what is even more surprising 0,9% p.q. for Austria.
Austria managed also to keep an otherwise insignificant growth of private expenditure of 0,1% p.q. which on the other hand currently outperforms most, if not all euro area countries. A tax reform is primarily “to blame” here. Seems that lowering taxes is always a good thing, even in a recession. Even though the reform was initiated in the aftermath of the summer 2008 oil-driven inflation, long before most people thought that a crisis would be forthcoming. Oh well.
Although the euro area rebound was largely expected and even anticipated to be stronger for some countries, it is still reassuring that the worst part of the recession is over. Q4 will most probably bring similar positive growth figures due to restocking and stronger exports. Yet in 2010, lower private consumption due to higher unemployment along with less public expenditure due to tighter public finances in most countries will put pressure on EU-wide GDP growth. Some analysts expect positive, albeit lower pace growth in 2010 but I am more than convinced that we will see a negative quarter here or there in some euro area countries. It is however unlikely in my opinion that we’d slip in yet another recession in 2010 (i.e. negative growth in 2 subsequent quarters).
I will try to find some time to blog about my expectations for 2010 for CEE/SEE…
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