Extracts from the press conference by Olli Rehn on the autumn economic forecasts for 2012-2014 (Belgium, Hungary)
Type: Summary of press conference
End production: 07/11/2012 First transmission: 07/11/2012
On 7 November 2012, Olli Rehn, Vice-President of the EC in charge of Economic and Monetary Affairs and the Euro, presented the economic autumn forecast for 2012-14 in the Euro area.
The short-term outlook for the EU economy remains fragile, but a gradual return to GDP growth is projected for 2013, with further strengthening in 2014. On an annual basis, GDP is set to contract by 0.3% in the EU and 0.4% in the euro area in 2012. GDP growth for 2013 is projected at 0.4% in the EU and 0.1% in the euro area. Unemployment in the EU is expected to remain very high.
The large internal and external imbalances that built up in the pre-crisis years are being reduced, but this process continues to weigh on domestic demand in some countries, and economic activity diverges significantly across Member States. At the same time, competitiveness lost in the first decade of Economic and Monetary Union (EMU) in some Member States is being gradually restored, so that export growth is projected to increase progressively as global trade starts reaccelerating. Further progress in consolidating public finances is underpinning this rebalancing process.
The structural reforms undertaken should begin to bear fruit over the forecast period, while advancements in the EMU architecture continue to strengthen confidence. This should pave the way for a stronger and more evenly distributed expansion in 2014. GDP growth in 2014 is projected at 1.6% in the EU and 1.4% in the euro area.
This video shows extracts from the European Economic Forecast for Belgium and Hungary.
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Soundbite by Olli Rehn, Member of the EC in charge of Economic and Monetary Affairs, (in ENGLISH): In Belgium, before the budget of this year, in the fall of last year, in the last months of 2011, the interest rates of Belgian government securities were knocking the levels of the Spanish public debt close to 6% or around 6%. Following the agreement on the budget in December-January and the subsequent formation of government, yields have come down and they have come down almost by 300 basis points so that Belgium came from 6% to 3% mainly because the confidence effect facilitated lower borrowing costs for Belgium where of course also the Six-Pack reinforcement of economic governance plays a certain role in encouraging Belgium to act and concentrating the minds to reduce the fiscal deficit this year.
||Cutaway of the audience
||Soundbite by Olli Rehn (in ENGLISH): I can only encourage Belgium to continue on this path of fiscal consolidation, this smart and carefully calibrated fiscal consolidation to ensure that its public finances are on a sustainable footing.
||Cutaway of a cameraman
||Soundbite by Olli Rehn (in ENGLISH): Concerning Hungary, we see a deeper recession and a postponed and weaker recovery compared to our spring forecast. There are several reasons; the external environment has worsened, domestic demand is also expected to be weaker, most notably on account of hard data on investment and stocks. From the production sight, this year's GDP pull down by the unusually weak agriculture production which was affected by the dramatic droughts. We expect some normalisation next year in this regard.
||General view of the audience