Austria to enter recession in 2009

VIENNA: Austria will likely enter a recession next year as the global economic downturn intensifies, the country's central bank said on Tuesday.

In a statement, the central bank predicted that Austria's real gross domestic product would shrink by 0.3 per cent in 2009 and that the number of unemployed would increase by about 45,000 over the next two years. For 2008, however, the bank said it expects growth of 1.6 per cent due to a strong first half of the year.

``As a result of the global downturn, a very serious situation has now developed for Austria's economy,'' central bank governor Ewald Nowotny said in the statement.

The central bank also predicted a ``slight recovery'' in 2010 with economic growth expected to be 0.8 per cent.