Economic growth in the Euro-zone is expected to slow this year according to the latest forecast by the European Commission. The executive's twice-yearly economic predictions estimate growth in the country's using the Euro will be 1.8 per cent in 2008.
The Commissioner for economic affairs, Joaquin Almunia, said:
"This slowdown in growth is in particular explained by the situation in the financial markets with increased uncertainty and tightened credit conditions, a cooling global economy especially in the United States, and higher oil and commodity prices."
The 1.8 per cent euro-zone growth forecast represents a considerable drop on the 2007 figure of 2.7 per cent. America has slashed its growth forecasts too - 1.3 to 2 per cent for the coming year - against 1.8 to 2.5 per cent in last November's forecast.
The Federal Reserve's lastest quarterly forecast takes into account what it called in its statement, 'the possibility that house-prices could decline more steeply than anticipated, further reducing households' wealth and access to credit,' and that, they believe is a significant risk to the central outlook for economic growth and employment.
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