The European Commission has raised its forecast for euro zone economic growth this year. It said it should be 2.6%, up from the 2.4% it predicted in February. EU economic and monetary affairs commissioner Joaquin Almunia credited improved consumer demand with helping the recovery.
At the top of the table, Ireland and Luxembourg with 5% growth this year, 4.3% for Slovenia and Spain and Greece should see their economies expand by 3.7%.
Almunia said: “The forecast that I am presenting today is a upward revision of growth since our last interim forecast in February, up by 0.2%, and a half point of GDP upward revision if you compare this forecast with the Autumn 2006 forecast.” But he warned that governments should not use the economic upturn as an excuse to ease up on reforms and their deficit reduction efforts.
The European Commission also said it believes that consumer price inflation will slow to 1.9% this year in the euro zone from last year’s 2.2%. That is just below the European Central Bank5;s target level.