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EU economy: modest growth expected in second half of year
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Published on 23-02-12

The unexpected stalling of the EU recovery in late 2011 is set to extend into the first two quarters of 2012 but modest growth is expected to return in the second half of the year, according to the latest interim forecast published by the European Commission.

    Commissioner Olli Rehn

    Commissioner Olli Rehn

    On an annual basis, real GDP in 2012 is now forecast to remain unchanged in the EU (0.0%) and to contract by 0.3% in the euro area. Uncertainty remains high and developments across countries are uneven. The inflation forecast for 2012 has been revised slightly upwards compared with the autumn, due to persistently high energy prices and increases in indirect taxes. It now stands at 2.3% in the EU and 2.1% in the euro area.

    Presenting the report Commission Vice-President for Economic and Monetary Affairs Olli Rehn said:

    "Although growth has stalled, we are seeing signs of stabilisation in the European economy. Economic sentiment is still at low levels, but stress in financial markets is easing. Many of the steps that were essential to deliver financial stability and to establish the conditions for more sustainable growth and job creation have now been taken. With decisive action, we can turn the corner and move from stabilisation to boosting growth and jobs."

    Background
    The European Commission usually publishes economic forecasts four times a year – comprehensive spring and autumn forecasts in May and November as well as smaller interim forecasts in February and September.

    Contrary to previous interim forecasts that built on the largest Member States, projections for the current publication are based on estimates for all EU and euro area Member States respectively.

    The next spring forecast will be published on 11 May 2012.

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    Last update: 29/02/2012  |Top