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EU recession close to inflection point but unemployment remains at 'unacceptable levels'

Thursday, November 7th 2013 - 07:44 UTC
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Moderate macroeconomic advances are not sufficient ”to claim victory' says Olli Rehn Moderate macroeconomic advances are not sufficient ”to claim victory' says Olli Rehn

The Euro zone economy's gross domestic product will grow 1.1% in 2014 and 1.7% in 2015, with imbalances diminishing as unemployment remains at unacceptable levels, the European Commission said in a report released earlier this week.

“There are increasingly more signs that the European economy has reached the inflection point,” European Commissioner for Economic and Monetary Affairs Olli Rehn said.

The Euro-zone economy is projected to end 2013 with a contraction of 0.40% in the GDP, Rehn said.

The European Union as a whole should end 2013 with GDP remaining unchanged and its 28 members posting growth of 1.4% in 2014 and 1.9% in 2015.

“The fiscal consolidation and structural reforms adopted in Europe have created the base for recovery,” Rehn said.

The moderate optimism surrounding the macroeconomic forecast, however, is not sufficient “to claim victory,” Rehn said.

The GDP forecast released by the European Commission was slightly less positive than the one made in May, when economists estimated that the Euro zone economy would grow 1.2% next year.

The unemployment rate in the Euro-zone is expected to be 12.2% in 2013 and 2014, with the jobless rate falling to 11.8% in 2015, while the unemployment rate for the European Union as a whole is projected to be 11.1% this year and to fall slightly to 11% in 2014 and 10.7% in 2015.

But further evidence of the Euro zone's fragile economic recovery came on Wednesday in two sets of data. Eurostat, the EU's statistics agency, said retail sales in the 17-nation bloc fell 0.6% in September from August. Meanwhile, Markit's composite purchasing managers' index (PMI) fell to 51.9 points in October from 52.2 in September.

The reading was, however, still above the 50-point mark that separates growth from contraction.

Categories: Politics, International.

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  • ChrisR

    “Moderate macroeconomic advances are not sufficient ”to claim victory' says Olli Rehn”

    This guy sounds like he might actually know what he is talking about.

    He is waiting for the second derivitive to be zero (clearly indicating the inflection point has been reached) before he jumps on the bandwagon of “the worst is over” which left some time ago carrying those who did NOT know what they were talking about.

    Nov 07th, 2013 - 06:29 pm 0
  • toooldtodieyoung

    The sooner we get out of the EU or the FU or the Common Market or whatever the hell it's called these days, The better.

    If it was a horse, the EU would have been sold to the glue factory in about 2009. It is a drain on our pockets and if good ol' “Dave” values his political survival, he will get us out....NOW.

    Come to think of it, it won't make any difference, I'm still voting UKIP.

    Nov 07th, 2013 - 07:37 pm 0
  • Briton

    They are now desperate; they have cut interest rates to almost zero,
    And still screw it up,

    Considering the unmighty EU has not been signed off by the auditors for the last decade,

    Is it a wonder why, it is destined to collapse..

    Nov 07th, 2013 - 08:38 pm 0
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