Economic Growth Remaining Subdued. Economic Outlook for 2003 and 2004

Economic activity is expected to expand by only 1.1 percent in 2003. Thus, for the third year in a row, economic growth will be only 1 percent per year. Prospects for 2004 are fraught with great uncertainties regarding the geo-political development and the reaction of economic policy. At present, growth is projected at 1.7 percent. Both in 2003 and 2004, the rate of expansion is likely to be the same as in the euro area. A cyclical recovery in Europe seems feasible only if world-wide uncertainties subside and commodity prices ease markedly.