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BackThe EU Commission assumes in its latest spring forecast that the EU economy is currently in slight recession. It has been estimated that the economic output in the Eurozone this year will fall by 0.3 percent, whilst zero growth has been predicted for the entire EU. The forecast expects a slow upturn which will probably start in the second half of the year.
When the EU Commission published its interim forecast in February, it already presented a less than positive outlook for the economic development for the current year; the recently presented spring forecast confirms the gloomy picture: the real GDP will stagnate in the EU and fall by 0.3 percent in the Euro area in 2012. 0.8 percent growth has been forecast for Austria - slightly more than the plus of 0.7 percent that the Commission had expected for this year’s Austrian economy in February.
After the economic output in the EU slightly fell in the last quarter of 2011, the spring forecast of the EU Commission confirmed that this trend continued in the first quarter of 2012. A slow recovery is expected for the second half of 2012 which will continue in the following year. Growth of 1.3 percent in the EU and 1.0 percent in the Euro area is expected for 2013. Austria’s economic output is expected to grow by 1.7 percent in 2013.
Great differences between individual Member States
“A recovery is in sight, but the economic situation remains fragile, with still large disparities across Member States”, commented EU Commissioner for Economic and Monetary Policy Olli Rehn, who called for a stability-oriented and growth-promoting policy.
The forecast for France predicts a GDP growth of 0.5 percent for 2012 and 1.3 percent for 2013; Germany is expected to grow by 0.7 percent in 2012 and 1.7 percent in 2013; according to the forecast, Italy will see a reduction of the GDP of 1.4 percent for this year, next year’s GDP is expected to grow by 0.4 percent.
The Baltic States recovered well after the crisis, said Commissioner Rehn. Greece was faced with great challenges, said Rehn; a new government had to be formed and the country had to find its way to solid growth. The forecast for 2012 predicts a slump of GDP of 4.7 percent for the crisis-ridden country, followed by a stagnating economic output in the following year. According to the forecast, Spain has to expect a reduction in GDP of 1.8 percent in 2012 and a minus of 0.3 percent for 2013; Portugal’s economy is expected to shrink by 3.3 percent in 2012, whilst growth will slightly pick up in the following year.
Unemployment in EU and Eurozone expected to reach alarming records
The EU Commission expects record unemployment figures for this and the next year. According to the forecast, the unemployment rates for 2012 and 2013 across the entire EU will be 10.3 percent; in the Eurozone the unemployment rate is expected to reach even 11 percent.
Whilst the gross debt in the Eurozone and the entire EU is expected to rise, the forecast predicts a reduction of budget deficits. Next year, the average budget deficit in the Eurozone is expected to fall slightly below the 3 percent limit set by the Maastricht Treaty.
The EU Commission will present its country-specific recommendations for the Member States within the context of the European Semester on May 30th.
However, in view of the gloomy economic forecast and record unemployment figures, it is already clear at this point that the EU must urgently set out jointly coordinated measures to kick start a growth and employment offensive.
Further information:
European Economic Forecast Spring 2012
After the economic output in the EU slightly fell in the last quarter of 2011, the spring forecast of the EU Commission confirmed that this trend continued in the first quarter of 2012. A slow recovery is expected for the second half of 2012 which will continue in the following year. Growth of 1.3 percent in the EU and 1.0 percent in the Euro area is expected for 2013. Austria’s economic output is expected to grow by 1.7 percent in 2013.
Great differences between individual Member States
“A recovery is in sight, but the economic situation remains fragile, with still large disparities across Member States”, commented EU Commissioner for Economic and Monetary Policy Olli Rehn, who called for a stability-oriented and growth-promoting policy.
The forecast for France predicts a GDP growth of 0.5 percent for 2012 and 1.3 percent for 2013; Germany is expected to grow by 0.7 percent in 2012 and 1.7 percent in 2013; according to the forecast, Italy will see a reduction of the GDP of 1.4 percent for this year, next year’s GDP is expected to grow by 0.4 percent.
The Baltic States recovered well after the crisis, said Commissioner Rehn. Greece was faced with great challenges, said Rehn; a new government had to be formed and the country had to find its way to solid growth. The forecast for 2012 predicts a slump of GDP of 4.7 percent for the crisis-ridden country, followed by a stagnating economic output in the following year. According to the forecast, Spain has to expect a reduction in GDP of 1.8 percent in 2012 and a minus of 0.3 percent for 2013; Portugal’s economy is expected to shrink by 3.3 percent in 2012, whilst growth will slightly pick up in the following year.
Unemployment in EU and Eurozone expected to reach alarming records
The EU Commission expects record unemployment figures for this and the next year. According to the forecast, the unemployment rates for 2012 and 2013 across the entire EU will be 10.3 percent; in the Eurozone the unemployment rate is expected to reach even 11 percent.
Whilst the gross debt in the Eurozone and the entire EU is expected to rise, the forecast predicts a reduction of budget deficits. Next year, the average budget deficit in the Eurozone is expected to fall slightly below the 3 percent limit set by the Maastricht Treaty.
The EU Commission will present its country-specific recommendations for the Member States within the context of the European Semester on May 30th.
However, in view of the gloomy economic forecast and record unemployment figures, it is already clear at this point that the EU must urgently set out jointly coordinated measures to kick start a growth and employment offensive.
Further information:
European Economic Forecast Spring 2012