EU won't rule out downgrading economic forecasts
EU Monetary Affairs Commissioner Joaquin Almunia refused to rule out Tuesday further downgrades to the European economic outlook due to the impact of the economic crisis.
On January 19, the European Commission estimated that the eurozone economy would shrink by 1.9 percent this year while the 27-nation European Union would see a contraction in the order of 1.8 percent.
It forecast that Europe would return to growth in 2010 with economic expansion of 0.4 percent among the 16 countries using the euro single currency, and 0.5 percent in the EU.
"When we presented the forecasts on January 19, I said the risks are broadly balanced," Almunia said at the European Policy Centre think-tank.
"Now I can say downside risks are bigger," he said.
Almunia also did not rule out the possibility that EU governments may have to ramp up their economic stimulus plans if existing packages fail to snap Europe out of an increasingly dire recession.
European governments are ploughing hundreds of billions of euros into their economies in hope of reviving activity, but economic data keep going from bad to worse while their budget deficits balloon in the meantime.
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