7th November 2014

Autumn economic forecast predicts only slow growth

On 4 November, the European Commission published its economic forecast for the upcoming months. At the end of this year, GDP growth is expected to reach 1.3% in the EU, 0.8% in the eurozone. In 2015 and 2016, a slight increase is expected, to 1.5% and 1.1% in 2015 and 2.0% and 1.7% in 2016 for the EU and the eurozone respectively. Commission Vice-President Katainen stated, that economic recovery is too slow and reiterated the Commission´s plan to introduce a €300 billion worth investment plan, which President Juncker promised the MEPs earlier, until the end of this year. Different Member States experience very different growths – Cyprus is set to fall by 2.8% this year, while Ireland´s GDP will boost by a highly above average value of 4.6%. Moreover, the unemployment situation is not improving fast enough either. Only a slight decrease is expected by 2016 – to 9.5% for the EU and 10.8% for the eurozone. It is only after 2016 that the Commission expects some meaningful decrease. The Commission also expects, that although the inflation in the EU is dangerously low this year, it should increase in 2015 and in 2016 due to some increase in economic activity and depreciation of the euro – it should be 1.5% in 2016, which would be much closer to the 2% target than the expected 2014 level of 0.6%. As for fiscal deficits both in the EU and in the eurozone are set to decrease in the following years, while government debt is expected to peak in 2015, before starting to decrease in 2016.

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Members of the American Chamber of Commerce in the Czech Republic