The European Commission said it anticipates economic downturn will be sharper than previously expected with EU and eurozone economies expected to shrink almost 2% in 2009.

According to the Commission's extended interim economic forecast GDP growth in the European Union is expected to fall by 1.8 % in 2009 before recovering moderately to 0.5% in 2010. This is the result of the impact on the real economy of the intensified financial crisis, the ensuing global downturn manifested in the severe contraction of world trade and manufacturing output and, in some countries, housing-market corrections, Brussels say.

"The measures to stabilise the financial market, the easing of monetary policies and the economic recovery plans will enable us to put a floor under the deterioration of the economy this year and create the conditions for a gradual recovery in the second part of 2009," said JoaquГ­n Almunia, Economic and Monetary Affairs Commissioner.

The Commission however said that the forecast is surrounded by exceptional uncertainty as the world economy faces its worst crisis since World War II.

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