22 February 2013 12:49 [Source: ICIS news]
LONDON (ICIS)--The eurozone economy is unlikely to return to growth until 2014, while the EU will barely expand this year, the European Commission said on Friday.
According to the commission’s latest forecast, eurozone GDP is likely to contract by 0.3% in 2013, as a result of a “disappointing” economic performance in the second half of 2012 leading to a low starting point for the new year. The EU economy is likely to expand by 0.1% during the year, the commission added.
According to the commission, the current economic malaise may represent a bottoming out for EU GDP, and momentum will start to pick up from now.
“We have disappointing hard data from the end of last year, some more encouraging soft data in the recent past, and growing investor confidence in the future. The decisive policy action undertaken recently is paving the way for a return to recovery. We must stay the course of reform,” said Olli Rehn, European Commission vice-president for economic and monetary affairs and the euro.
Quarterly GDP performance is likely to be “more dynamic” than the annual figures suggest, the commission added, stating that economic expansion is likely to be 0.5% in the fourth quarter of 2013 in the EU, up 1% from the same period last year, and 0.1% in the eurozone during the same period compared with a 0.6% contraction in the fourth quarter of 2012.
“Domestic investment and consumption are projected to recover later in the year, and by 2014 domestic demand is expected to take over as the main driver of strengthening GDP growth,” the commission said.
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