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In the fourth quarter of 2008, in both the euro area and the EU27, the seasonally adjusted household saving rate increased, while the household investment rate decreased. In both zones, businesses recorded a fall in investment rates and in profit shares.

In the fourth quarter of 2008, the annual growth rate of net disposable income in the euro area equalled -0.4%, compared with 3.0% in the third quarter of 200. The annual growth rate of consumption was 2.2% in the fourth quarter, which was lower than in the third quarter (4.3%). The annual growth rate of gross fixed capital formation decreased to -3.1% in the fourth quarter of 2008, from 3.4% in the previous quarter. In the fourth quarter the annual growth rate of net saving declined to -24.9%, from -10.9% in the previous quarter.

The French economy has not escaped the severe recession gripping all developed countries. After ending the year 2008 with a sharp decline, output is likely to contract further during the rest of this year, and prospects for 2010 remain highly uncertain, despite the many stimulus plans at home and abroad. The recession should be less deep than elsewhere, due inter alia to powerful automatic stabilisers. However, while the finances of big banks and households do not appear to be in as bad shape as they are in several other countries, the capacity of the French private sector to revive activity in advance of a global recovery is limited. Moreover, given the already high deficit and debt levels, the crisis will leave public finances in a serious condition.

The Bloomberg Euro-Zone Retail Purchasing Managers' Index is based on a mid-month survey of more than 1,000 executives in the euro area retail sector and provides data one month ahead of government-issued figures. The PMI rose in April to 48.4, from 44.1 in March, indicating the weakest rate of decline since the current sequence of contraction began last June. Although sales have now fallen for 11 consecutive months, the rate of decline has eased from the series record registered last November.

The Commission adopted a €139bn preliminary draft budget for 2010. Economic recovery is at the heart of next year’s spending and the proposal channels the biggest share of funds (45%) into growth and employment measures – a 3.2% rise on 2009 – to help restore competitiveness across the Union. Funds for major programmes linked to research and energy will increase by more than 12% and cash for cohesion policy will grow too, with the EU-12 set to receive 52% of cohesion and Structural Funds. All headings in the budget will see an increase, reaching a total of €138.6bn in commitments (1.18% of GNI) and €122.3bn in payments (1.04% of GNI).

In April, the Economic Sentiment Indicator (ESI) for the EU and the euro area picked up for the first time since May 2007 (excluding a small blip in March 2008 for the EU). It increased by 3.5 points in the EU, and by 2.5 points in the euro area, to 63.9 and 67.2 respectively.

The annual rate of growth of M3 decreased to 5.1% in March 2009, from 5.8% in February 2009. The three-month average of the annual growth rates of M3 over the period January 2009 - March 2009 decreased to 5.6%, from 6.4% in the period December 2008 - February 2009.

Between 2000 and 2008, EU27 exports of goods to Japan fell in value, from 45 bn euro to 42 bn, while EU27 imports from Japan decreased by nearly a fifth, from 92 bn to 75 bn. As a result, the EU27 deficit in trade with Japan was reduced from 47 bn in 2000 to 32 bn in 2008. The share of Japan in the EU27's total external trade in goods has fallen significantly between 2000 and 2008. In 2008, Japan accounted for 3% of EU27 exports and 5% of EU27 imports, and was the EU27's sixth most important trading partner.

The results of the April 2009 bank lending survey show that in the first quarter of 2009 the net percentage of banks reporting a tightening of credit standards on loans and credit lines to enterprises was 43%, which – while still reflecting a pronounced further net tightening – was 21 percentage points lower than in the fourth quarter of 2008. This could point to some stabilisation of the current tightening cycle. For the second quarter of 2009, the banks expect a further reduction of the overall net tightening to 28%. The most important driving forces behind the net tightening in the euro area continued to be expectations regarding general economic activity and the industry or firm-specific outlook.

Fitch Ratings says that borrower delinquencies and defaults in Spanish consumer ABS and RMBS transactions are likely to continue to increase in the coming months as the unemployment rate rises to levels not seen since the last recession in the early 1990's.