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Economic forecast 2012-14: EU gradually overcoming headwinds - 22/02/2013

Hands holding binoculars on a table with a bar graph © istock/RBFried

Return to growth more gradual than expected, says Commission's latest forecast – despite substantial improvement in EU financial market conditions since summer 2012.

After a disappointing second half of 2012, slow economic growth of just 0.1% is forecast for the EU as a whole in 2013. The eurozone economy is expected to contract by 0.3%.

The improved financial market situation has not yet worked through into better growth, and prospects for 2013 remain muted. But, as the pre-crisis imbalances continue to be reduced, growth should start to pick up, with the 2014 forecast figures 1.6% in the EU and 1.4% in the eurozone.

Unemployment

The weak economy this year is expected to see unemployment rates rise to 11.1% in the EU and 12.2% in the eurozone.

Inflation

Inflation in the EU should decrease gradually in the course of 2013 and stabilise at around 1.7% in the EU and 1.5% in the eurozone next year.

Public finances

As many EU countries are implementing fiscal consolidation measures, budget deficits are projected to shrink to 3.4% in the EU and 2.8% in the eurozone in 2013.

New winter economic forecast

These projections appear in the Commission's first ever 'winter economic forecast ' for the eurozone and the EU as a whole (published on 22 February). The new forecast is part of the EU's efforts to monitor national economies and public finances more closely, prompted by the economic and financial crisis. The forecast covers GDP growth, inflation, employment and public finances for 2012-14.

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