European Commission revises up eurozone forecast

6 May 15

Economic growth in the eurozone is expected to strengthen from 0.9% in 2014 to 1.5% this year, the European Commission predicted.

Its 2015 Spring economic forecast revised up the eurozone’s outlook for 2015 by 0.2 percentage points from its forecast three months ago citing lower oil prices, a weaker euro and quantitative easing.

Its 2016 growth forecast remained unchanged at 1.9%.

European Commissioner for economic and financial affairs Pierre Moscovici added that structural reforms implemented so far would also continue to bear fruit.

But he noted that restarting economic growth after the crisis had been ‘long and tedious’.

‘It has been marked by numerous “goings and comings” but there is now clear evidence that a cyclical recovery is underway,’ Moscovici said.

‘All countries in the EU are set to gain from the positive tailwinds, but the extent to which they will benefit will depend on several factors such as the varying responsiveness of their individual economies to lower oil prices and the euro depreciation. The European Central Bank’s quantitative easing is also likely to have a higher impact in countries with tight financing conditions.’

The recovery will be helped along by Spain which is expected to see economic growth of 2.8%, while the German economy is predicted to grow by 1.9%.

Greece’s economic outlook was cut by 2 percentage points from the previous forecast and the Greek economy is expected to grow by only 0.5% this year, followed by a growth of 2.9% in 2016.

The commission said a downward revision for Greece was ‘unavoidable’ because of persistent uncertainty over its outstanding debts and policy measures.

In the EU as a whole, economic growth is predicted to increase from 1.4% in 2014 to 1.8% this year and to accelerate further to 2.1% in 2016.

  • Judith Ugwumadu
    Judith Ugwumadu

    Judith writes about public finance, public services and economics across Public Finance International and Public Finance. She previously undertook reporting stints at Financial Adviser, Global Security Finance and The Sunday Express.

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