For the first time since 2007, the economies of all European Union (EU) member states are expected to grow again this year - some slightly.
The European Commission raised economic forecasts today in response to the sharp drop in global oil prices and a weaker euro.
The economists see 1.3% Eurozone GDP growth this year and 1.9% in 2016 compared with a November forecast of 1.1% in 2015 and 1.7% next. The commission raised its growth estimates for most of Europe’s biggest economies including Germany, France and Spain.
January 23 was the cut-off date for the forecasts - two days before the Greek general election.
Pierre Moscovici, the EU’s economics commissioner, said Thursday that it's imperative that the European Union gives the new Greek government room for manoeuvre. “It’s absolutely normal in a democracy that when a new government comes into a capacity of action, it needs to be heard,” he said. “Of course there must be and can be changes in policies. If not, why should we vote in the EU?”
Greek growth is expected at 2.5% this year, down from a November estimate of 2.9%. “The growth momentum was fairly firm in the second half of 2014, although the early election has affected confidence and investment,” the commission said.
Growth this year is forecast to rise to 1.7% for the EU as a whole and at 2.1% in 2016. All in all, in 2015, the range of growth rates is expected to remain broad, from GDP growth of 0.2% (Croatia) to 3.5% (Ireland).
In the EU, inflation is projected at 0.2% in 2015 and 1.4% in 2016. Inflation in the euro area is forecast to be -0.1% this year before rising to 1.3% in 2016.
The unemployment rate is set to fall to 9.8% in the EU and 11.2% in the euro area in 2015. "The labour market reforms undertaken in recent years are expected to continue bearing fruit and help unemployment rates decrease further in 2016."