Eastern European economies to contract 5 per cent in 2009

The economies of the EBRD region are expected to contract on average by about 5% in 2009 after growth of over 4% in 2008 and almost 7% in 2007, according to latest forecasts from the EBRD’s Office of the Chief Economist, May 2009.

The global economic crisis, which initially had an immediate impact on the financial sector, is now severely affecting the corporate sector, leading to large declines in output in late 2008 and in the first quarter of this year. It has also started to depress domestic consumption.