In its autumn forecasts European commission has revised down the growth forecasts for European Union and euro area. The report said, “Annual GDP growth in the EU this year is now projected to be 1.3%, while growth in the euro area is expected to be 0.8%.”
“Growth in the EU is forecast to rise to 1.5% in 2015 and then increase modestly to 2.0% in 2016, while in the euro area, growth is forecast to reach 1.1% and then 1.7%”, it added.
In its report, European Commission said that EU’s GDP growth struggled to gather momentum in the first half of 2014, leaving the revival process subdued and fragile and recent data from the euroarea suggest weak activity for rest of the year.
Turning its focus on the member states, the Commission said that growth in Germany has halted, the French economy is expected to grow at a slower rate in 2015 amid a subdued pace of private consumption and contracting investment and in Italy, GDP growth is expected to turn positive early next year, as rising external demand is set to drive a still fragile recovery.
Pierre Moscovic, EU's economics commissioner, told a news conference, "There is no single and simple answer. The economic recovery is clearly struggling to gather momentum”.
Marco Buti, the director general of the Commission's economics department said, “The slowdown in Europe has occurred as the legacy of the global financial and economic crisis lingers”.
"We see growth ... coming to a stop in Germany ... protracted stagnation in France and contraction in Italy," he said in a statement on the forecasts for 2014 to 2016.
The report said that economic activity would ‘gradually strengthen over the course of 2015 and accelerate further in 2016’, when structural reforms starts giving results, labour markets improve and more supportive policies and financing conditions are in place.
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