The European Commission has said economic growth in the euro zone will probably accelerate slightly in the spring and early summer. The predictions, in the Commission’s latest report, are derived from a new forecasting model based on 2,000 businesses and economic data from all euro zone countries. It believes growth will expand about 0.6% in the last and current quarters, mirroring the improvements in the third quarter of 2005, and that it will expand to about 0.7% during the three months ending in June.
The latest revised figures from the EU statistics office Eurostat show that exports, which have been driving growth in much of the region, were actually lower than had been originally calculated. That is good news as it shows the balance is shifting. The revised figures reveal a slight increase in domestic demand, which is needed for sustained growth, along with improving household consumption.
Eurostat’s latest calculations for the third quarter showed that on an annual basis the economy of the 12 countries using the euro grew 1.6% in the period. Economists said that the forecast is likely to strengthen the case for more interest rate rises by the European Central Bank.