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'Worst may be behind us’: Eurozone growth outlook raised slightly to 1.2% for 2014

Published time: February 25, 2014 16:48
The Euro currency sign is seen in front of the European Central Bank (ECB) headquarters in Frankfurt (Reuters / Lisi Niesner)

The Euro currency sign is seen in front of the European Central Bank (ECB) headquarters in Frankfurt (Reuters / Lisi Niesner)

The Eurozone’s GDP will grow 1.2 percent in 2014 but will not reach the rates of its main western competitors or China, the European Commission said Tuesday. The US economy is forecast to grow 2.9 percent and China 7.9 percent, the EC said.

High debt and unemployment will continue to stall recovery in the 18-member Eurozone after the sovereign debt crisis that hit in 2008, forcing five countries into bailout programs followed by heavy austerity measures, the forecast says.

Official unemployment levels will fall 12 percent in the coming year, while sovereign debt will inch up to 95.9 percent of GDP. In total, the Eurozone holds $11 trillion in debt, with a majority of that in Europe’s economic “south” – Greece, Cyprus, Spain, Portugal and Italy. The most indebted country, Greece, has a debt of 176 percent of its gross domestic product.

The European Commission has revised its Eurozone growth forecast upward since November, when it predicted 1.1 percent GDP growth for 2014.

The worst of the crisis may now be behind us, but this is not an invitation to be complacent as the recovery is still modest,” Olli Rehn, EU Commissioner for Economic and Financial Affairs, said in Strasbourg, France.

To make the recovery stronger and create more jobs, we need to stay the course of economic reform,” Rehn told reporters.

The Eurozone’s best-performing economy, Germany, is set to grow by 1.8 percent, driven by strong exports and a determination to enforce thrift. Germany’s predicted growth is three times Italy’s.

Britain, which has stayed out of the Eurozone, was forecast to grow by 2.5 percent – higher than France or Germany.

However it’s too early to speak about an economic recovery, as unemployment figures remain slow in improving. The worst-hit countries, Greece and Spain, are predicted to finish the year with slightly lower rates of unemployment, at 26 percent and 25.7 percent, respectively. But in some other Eurozone countries member states the unemployment rate is set to rise further, in Portugal, to 16.8 percent; in Cyprus, to 19.2 percent; and in France, to 11 percent.

Overall, Eurozone unemployment will drop very slightly from 12.1 percent to 12.0 percent this year, the forecasts predict.

Comments (9)

 

Robert Neal 22.03.2014 20:56

Friends, Europeans. let us emigrate to Russia. There, everything is better. Freedom of speech, no corruption, high wages, women, protection of investment. Freedom of the press, freedom of assembly .. Stalin .. uh Putin is good

 

Robert Neal 22.03.2014 20:50

chris 25.02.2014 19:12

These itheir actions has ruined many Countries in Europe and caused serious poverty and misery to countless millions,not to mention the civil unrest that's fermenting all over Europe

  


"countless millions" are you serious ? "countless millions" lurid tags ;) "civil unrest" Attention dramatic pause ! actions has ruined many Countries in Europe LOL

 

Derek Maher 09.03.2014 23:02

Ah well, All is not doom and gloom in the eurozone E.U. for certain groups of E.U. citizens.
We have the political classes. The E.U. autocrat classes.
The CEO Banker classes etc.
For those who are homeless or unemployed the advice is to rummage through the refuse bins of the better class restaurants who cater for the above mentioned classes.
For all citizens of the E.U. who feel that things are not going well change your voting pattern in future elections.

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