EU predicts economic growth

The European Commission today (29 November) raised its growth forecast for the EU despite the debt crisis affecting the eurozone.

Gross domestic product (GDP) in the EU is predicted to increase by 1.8% in 2010, up from a figure of 0.9% given in May. GDP is forecast to increase by 1.7% in 2011 and by 2.0% in 2012. Growth in the eurozone is expected to be 1.7% in 2010, 1.5% in 2011 and 1.8% in 2012.

The Commission's twice-yearly economic report indicated there were signs that the recovery was accelerating but warned that improvements were still uneven across the member states.

The report suggested that despite its positive forecast, many countries were still struggling to cope with the economic situation.

Olli Rehn, the European commissioner for economic and monetary affairs, said: “The economic recovery has taken hold.

“I am encouraged by the prospect that employment is finally set to improve next year in Europe.

“Public deficits are starting to decline thanks to the consolidation measures taken and to the resumption of growth.”

The budget deficit for the 27 EU member states is forecast to be 6.8% of GDP this year, decreasing to 5.1% next year and to 4.2% in 2012. For the 16 members of the eurozone, it is expected to be 6.3% in 2010, 4.6% in 2011 and 3.9% in 2012.

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EU predicts economic growth