Eurozone return to growth predicted for 2014

8 Oct 13
Growth will return to the eurozone area next year, with European economic analysts expecting a gross domestic product increase of 1%.

A report issued today by the European Forecasting Network predicted that unemployment across the region would stay at levels similar to those recorded this year (12.3%).

The strength of the recovery in 2014 will ‘to a large extent depend on financial conditions for private households and firms, in particular in Spain and Italy’, the network said.

Inflation expectations for next year remain low, at about 1.4%.

The report also noted that the recovery in the eurozone was partly due to special factors, such as a rebound in construction after a particularly cold winter. However, other positive factors would be longer-lasting, particularly greater confidence about the future of the currency union.

‘As a consequence, private households and firms are more prepared to take spending decisions,’ the network said.

The network has also improved its outlook for the current year, but predicted the currency area’s economy would still contract in 2013. It now predicts output will be down 0.3% over the 12 months, less of a contraction than the 0.5% projected in the summer.

The European Forecasting Network is a research group of European institutions, founded under the auspices of the European Commission.

Participating institutions include the European University Institute in Italy, the Halle Institute for Economic Research in Germany and the University of Birmingham in England.

Did you enjoy this article?

Related articles

Have your say

Newsletter

CIPFA latest

Most popular

Most commented

Events & webinars