The Austrian Institute of Economic Research (WIFO) reported Friday in its "Prognosis of Economic Research for 2008/09" that the crisis in the international financial system due to the US economic recession would negatively influence the global economy.
The Director of the WIFO, university professor Dr. Karl Aiginger explained that the current international financial crisis was mainly due to the serious bank crisis in the US, caused by the recession of its housing market. However, a global economic crisis cannot be foreseen at this time.
The prognosis says the exchange rate between the euro and the dollar would reach a possible high of 1.60 this year, with a period of high oil prices of around 95 US dollars per barrel (dpb) in 2008 and 97 dpb in 2009.
The record-high exchange rate between the euro and dollar of 1.59 was set on March 17. The average international oil prices in 2006 and 2007 were 65.1 dpb and 72.5 dpb separately.
According to the prognosis, although the recession in the US economy caused a slowdown of the global economy, economic growth in the eurozone would be comparatively higher than the US in 2008 and 2009.
Economic growth in EU threshold countries and raw material-exporting countries would be faster than the western industrialized countries over the same period, said the WIFO.
The prognosis also states that Austrian economic development would be curbed within this negative international economic environment. and 2009 would be a year of "adventure".
The prognosis predicted the Austrian gross domestic product (GDP) in 2008 and 2009 would increase by 2.1 and 1.7 percent respectively, lower than than the 2006 level, which was around 3.4 percent.
(Xinhua News Agency March 29, 2008)
