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VIENNA, Jan 20 (Reuters) - Economic growth in emerging Europe will fall close to zero this year due to the global economic crisis, the European Bank for Reconstruction and Development said on Tuesday.
Governments, central banks and market watchers have slashed their forecasts for growth and inflation across central and eastern Europe due to the combined effects of the credit crunch, a slowdown in the real economy, and investors dumping assets.
"The whole region is under serious pressure," EBRD Chief Economist Erik Berglof told a conference in Vienna.
He said 2009 growth would be below 2 percent and closer to zero than to 2 percent for the entire region.
The bank said last week it was cutting its forecast for the region. It previously expected 3 percent growth in 2009, from an estimated 6.3 percent in 2008 and a record 7.5 percent in 2007.
Also at the conference, Serbian Deputy Prime Minister Mladjan Dinkic said growth in his country would fall to half of that from 2008 but Serbia would avoid a recession. In December, Serbia's government forecast economic growth of 3.5 percent for 2009, versus expected growth of around 6 percent last year.
The EBRD was set up after the fall of Communism to finance development projects in the former Soviet Union, Central and Eastern Europe and other countries in the region, with most funding coming from Western governments. (Reporting by Michael Winfrey; Editing by Mike Peacock)