Spring forecast for EU countries cautiously optimistic
The 2013 Spring Forecast from the European Commission on May 3, 2013 anticipates the end of the previous year's recession. As such, the economy in the EU is to stabilize in the first half of 2013, before slowly progressing into a period of increased growth in the second half of the year. While initially it is export that is driving GDP growth, the Commission expects a higher proportion of internal demand in 2014.
The slowly improving economy will initially have no effect on unemployment. According to projections, the 2013 unemployment rates in the EU countries are to lie at eleven percent, with the rate in the Euro area at twelve percent. In general, however, minor employment increases are to be expected for 2014. According to projections, the average figures do not, however, hide the fact that the regional variation when it comes to employment figures is to remain considerable. Nevertheless, the projection gives the all-clear with regard to inflation. The rate is expected to be 1.8 percent, or even slightly below this.
With regard to general government deficits, a slower budgetary consolidation is to be expected. Thus the debt ratio in the EU is to climb to 89.9 percent, with the ratio in the Euro Zone climbing to 95.5 percent. However, the authors commented critically that in view of the major uncertainties in terms of economic development and the uncertainty regarding possible changes to the political conditions, the projected figures are to be treated with caution.
Commission Vice President and Commissioner for Economic and Monetary Affairs and the Euro, Olli Rehn, explained: "In view of the protracting recession, we must now do everything possible to overcome the high level of unemployment in Europe. The policy mix in the EU is focused on sustainable growth and the creation of jobs. Public finances are being further consolidated, yet the pace is slowing. At the same time, structural reforms must be intensified in order to generate growth in Europe.