| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : EU Economy Last Updated: Nov 4, 2014 - 2:06 PM

European Commission forecasts slow recovery with very low inflation
By Finfacts Team
Nov 4, 2014 - 2:01 PM

Email this article
 Printer friendly page

Eurozone countries in blue

The European Commission's autumn forecast published Tuesday projects weak economic growth for the rest of this year in both the EU and the Eurozone. Real GDP growth is expected to reach 1.3% in the EU and 0.8% in the Eurozone for 2014 as a whole, down from 1.2% six months ago. Growth is expected to rise slowly in the course of 2015, to 1.5% and 1.1% respectively, on the back of improving foreign and domestic demand. An acceleration of economic activity to 2.0% and 1.7% respectively in 2016 is expected to be driven by the strengthening of the financial sector (following the comprehensive assessment by the European Central Bank and further progress towards the banking union), "as well as recent structural reforms starting to bear fruit."

Inflation in the Eurozone will remain below the close-to 2% target of the European Central Bank until at least 2016, which is likely to trigger more aggressive measures by the ECB such as large-scale purchases of government bonds and other assets.

The Commission said Eurozone inflation is likely to be just 0.5% this year and 0.8% in 2015, rising to 1.5% in 2016.

The Commission noted that the Irish business cycle is decoupling from that of the euro-area, with Ireland benefiting from its strong trade links with the more dynamic UK and US markets. Net exports and the recovery in domestic demand are likely to fuel real GDP growth of 4.6 % in 2014. Sustained growth is set to continue in 2015 and 2016 at around 3.6 %, with some stimulus provided by tax cuts and expenditure increasing measures in 2015.

The unemployment rate should fall further but remain above 8 % over the forecast horizon, putting a lid on wage demands.

UK growth was upgraded to 3.1% from 2.7% forecast in the spring.

Germany will grow by 1.3% in 2014 and 1.1%  in 2015 - down from 2% in May - while the respective rates in France and Italy will be 0.3%, 0.7% - down from 1.5% in May - and -0.4% and 0.6%.

Jyrki Katainen, European Commission vice-president for Jobs, Growth, Investment and Competitiveness, said: "The economic and employment situation is not improving fast enough. The European Commission is committed to use all available tools and resources to deliver more jobs and growth in Europe. We will put forward a €300 billion investment plan to kick-start and sustain economic recovery. Accelerating investment is the linchpin of economic recovery."

Pierre Moscovici, commissioner for Economic and Financial Affairs, Taxation and Customs, said: "There is no single, simple answer to the challenges facing the European economy. We need to act across three fronts: for credible fiscal policies, ambitious structural reforms and much-needed investment, both public and private. We must all assume our responsibilities, in Brussels, in national capitals and in our regions, to generate higher growth and deliver a real boost to employment for our citizens."

Today's report said taht the economic recovery that started in the second quarter of 2013 remains fragile and the economic momentum in many member states is still weak. "Confidence is lower than in spring, reflecting increasing geopolitical risks and less favourable world economic prospects. Despite favourable financial conditions, the economic recovery in 2015 will be slow. This, reflects the gradual fading of the crisis legacy with still high unemployment, high debt and low capacity utilisation."

“Geopolitical tension and concerns about economic developments in important trading partners may have triggered a wait-and-see attitude among firms,” today's report commented on Germany.

“However, as domestic and external demand pick up, geopolitical and other external uncertainty decreases and favourable financing conditions hold, corporate investment should resume its recovery in 2015.”

Dreams of European Growth: France and Italy facing pre-euro economic problems

© Copyright 2011 by Finfacts.com

Top of Page

EU Economy
Latest Headlines
Spain's strong recovery to slow in the next few years
Italy's Mezzogiorno is Achilles' heel of Euro Area - lowest birth rate since 1862
Euro Area GDP grows at weak 0.3% in Q2 2015
German GDP up 0.4% in Q2 2015; France's GDP stagnates
Germany's Surplus: Lots of critics; Credible solutions scarce
Euro Area industrial production dips in June and May after a flat April
Greece faces two years of recession according to EU officials
High EU youth unemployment rate not as bad as it seems
Eurozone retail PMI surges to highest since January 2011
ECB monetary policy still tight for Southern Europe
German exports fell in June — surplus at record; Exports up 13.7% year-on-year
Eurozone manufacturing sector continued to expand in July
Weak euro unlikely to have significant impact on Euro Area growth
Is Euro Area Ireland's top trading partner?: EU28 is overwhelmingly UK's
German car firms boost exports from Spain, UK, Portugal, Czech Republic, Slovakia, Hungary and Romania
Flash Eurozone manufacturing/ services PMI close to four-year high despite Greek crisis
Krugman calls euro a Roach Motel; Hotel California gets 1-star grade
Greece & Euro Crisis: July 2015 articles from Finfacts
Greece and other poor countries in Euro Area will not become rich
Euro Area manufacturing/ services PMI hits four-year high in June
Western European car market: Recovery continues
Greece could become a failed state like Venezuela
Multinational companies pay on average 30% less tax than domestic competitors in EU
EU's list of 30 tax havens omits the biggest 4 in Europe
China to invest in Juncker's European investment fund
Greek talks collapse; Game theorists gambling with future — Germany's vice-chancellor
German exports and industrial production in strong rises in April
Tackling Inequality: Scandinavian countries have the most successful welfare systems in Europe
Eurozone unemployment fell by 130,000 in April 2015 — down 849,000 in 12 months
Eurozone service sector business activity slowed during May
German 2015 GDP forecast cut; Jobless level at 24-year low
Eurozone manufacturing in modest acceleration in May
FDI into Europe at record in 2014; UK on top: Germany location for future investment
Eurozone economy loses growth momentum; Jobs growth rises
Athens leak suggests Juncker has plan for Greece
Draghi will not end QE early but warns of risks
Eurozone grows faster than US and UK in Q1 2015
German GDP at slower pace, France faster in Q1 2015
Germany may cut income tax; Germans still shun risky investments
Germany had record exports and imports in March 2015