As illustrated in the chart below , this decline is far too sharp to be explained by the slowdown in economic activity .

This development , together with the slowdown in economic activity , was , in turn , expected to support the continuation of wage moderation .

The Organization for Cooperation and Economic Development (OECD) said that most member countries showed in September clear signs of economic slowdown.

Industrial production growth started to decline from the beginning of 2001 and all available surveys on economic conditions also pointed to some slowdown in economic activity in the first few months of 2001 .

In the aftermath of the terrorist attacks of 11 September , it became increasingly clear that the economic slowdown in the euro area would be more protracted than previously expected .

This loosening was most evident in countries where major tax cuts were implemented without sufficient offsetting expenditure restraint . However , beyond this discretionary fiscal relaxation , the budgetary outcomes in 2001 were also affected by the functioning of automatic stabilisers .

In the aftermath of the attacks of 11 September , it became increasingly clear that the economic slowdown in the euro area would last longer and be more pronounced than previously expected .

But the yen had risen regularly since then, stimulated by purchases by investors who regard it as a shelter in these uncertain times of worldwide economic slowdown and the debt crisis in Europe.

As regards the euro area , recent surveys suggest that the pace of contraction is clearly slowing down . However , economic activity over the remainder of this year is expected to remain weak .

The expected slowdown reflects the lower growth of both exports and domestic demand .

The decline in inflation rates is due mainly to the fall in commodity prices and the significant slowdown in economic activity largely related to the global effects of the financial turmoil .

This scenario is based on the expectation that the global economy will remain resilient , with the slowdown of economic growth in the United States partly offset by the sustained strength of emerging market economies .

In addition , it also partly reflects a weakening in GDP growth due to factors such as slower expansion at the global level and dampening effects from high and volatile oil and food prices .

This rapid deterioration of the fiscal position is broad based among euro area countries and is due to the significant economic downturn , additional revenue shortfalls and the fiscal stimulus measures adopted by many governments .

The recovery in the economies of East Asia and Latin America continued , while there were no signs of a slowdown in the United States .

This apparently sharp slowdown includes the effect of a hurricane in December 1999 , which boosted activity in 2000 .

Much of the growth deceleration in emerging and developing countries reflects China s slowdown.

Slowdown in credit to the private sector Chart 4 provides an overview of the developments in M3 and its counterparts in 2001 .

The dampened GDP growth expected over the projection horizon reflects weaker export growth and subdued domestic demand .

Economic slowness

ECONOMIC POLICY

Trade Paperback

Factors that account for the budgetary deterioration are the working of automatic stabilisers in the context of the slowdown in economic activity and the implementation of major tax cuts in some euro area countries without sufficient offsetting expenditure restraint .

This task was made harder by the global shock related to the terrorist attacks in the United States on 11 September , which increased uncertainty and aggravated the economic slowdown already taking place in the world economy and the euro area .

for euro denominated debt , but the growth in the market was due to the continued strong issuance by the private non MFI sector ( see Chart 5 ) . The decline in the issuance activity of the MFI sector seems to have been largely due to lower credit demand by the private non financial sector against a background of slowing economic activity , combined with rising inflows of deposits to MFIs ( see Section 2.1 ) .

. the economic recovery .

External Developments

Subject Economic cohesion

In addition , the weakening of economic growth is likely to have played an important role in the slowdown of the growth of loans to corporations .

In the EU accession countries , the decline in growth in the course of 2002 was limited .

In 2008 , as labour productivity growth is expected to decline as a result of cyclical developments , the growth of unit labour costs is projected to increase substantially . The impact of the latter on inflation is expected to be dampened , however , by declining growth in profit margins in view of the economic slowdown .

It will increase European economic competitiveness and contribute to economic and social cohesion .

Economic situation amp statistics

Economic and Monetary Union

Directorate Economic Developments

Economic Policy Committee

The NCB statutes may contain provisions on monetary policy instruments .

Belgo Luxembourg Economic Union

ECONOMIC AND MONETARY POLICY

Our food is cheap.

A worsening economic situation.

Asia Pacific Economic Cooperation

As anticipated on 15 January , the latest economic data and survey information confirm that the euro area and its major trading partners are undergoing an extended period of significant economic downturn , and that accordingly both external and domestic inflationary pressures are diminishing .

What we are talking about is the degree, the nature, the time scale, the trigger mechanisms and the method of evaluation of work of this new, powerful institution.

Economic , monetary and financial situation