Euro Area Economy Drawing Lagged Benefits from Currency Depreciation and Buoyant Global Trade. Economic Outlook for 2010 and 2011

  • Gerhard Rünstler

World trade rebounded further in the first few months of 2010, its volume meanwhile approaching the pre-crisis level. On the back of the boom in Asia, the recovery in the USA and the depreciation of the euro, euro area exports should make good headway. Nevertheless, the cyclical upturn will remain muted for still some time, due to sluggish domestic demand. Major risks derive from macroeconomic imbalances and financial market volatility. For Austria, WIFO expects real GDP to grow by 1.2 percent in 2010 and 1.6 percent in 2011.