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EU newcomers to see slower growth in 2009, but ahead of "oldies"

04 July 2008, 22:05 CET

(VIENNA) - EU newcomers from eastern Europe are likely to see slower economic growth in 2009, although momentum will remain well above the average in the rest of the bloc, the Vienna Institute for International Economic Studies (WIIW) said in a report published Friday.

Average growth in the 10 new EU members that joined the bloc in 2004 and 2007 was expected to fall to 4.9 percent in 2009 from 5.2 percent in 2008 and 6.2 percent last year, the WIIW said in its report.

This was far ahead of the older EU members however, who could only expect 1.5 percent average growth next year, compared to 1.7 percent in 2008 and 2.7 percent in 2007.

Maximum growth rates of 6.0 percent were expected in Bulgaria and Slovakia, the report also said.

"The resilience of the new member states of the EU derives from growing labour productivity partly offsetting the combined effects of appreciating currencies and rising wage costs," the WIIW said in a statement ahead of the publication of the report.

The exceptions were Latvia, Estonia and to a certain extent Hungary, which could expect 1.0-percent, 2.0-percent and 3.4-percent growth next year respectively.

But the WIIW expected them to catch up with the other newcomers by 2010, bringing average growth to 5.2 percent.

The same trend was likely to be seen in EU accession candidates Croatia and Turkey as soon as 2009, with growth rising to 4.5 and 5.0 percent respectively from 4.2 and 4.0 percent in 2008.

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