Euro Area GDP forecast

Using Euro COIN data released last week, I constructed two trend points (short-run trend consistent with contraction from Q3 2006, and long-term trend consistent with entire time series from January 1999). These provide forecast for January-February 2009 Euro area GDP growth based on the trends and predictive power of the Euro COIN model. The series, including forecasts, plotted in the graph below, point to a continued and deepening contraction in the Eurozone economy through February 2009.