The European Commission says the eurozone economy is likely to grow at nearly double the previously-forecast rate this year, mainly because of the surging German economy.
The rosy revision came in the commission’s twice-yearly interim economic forecast, with the eurozone figures turning around from a 4.1 percent contraction last year to 1.7 percent growth, up from 0.9 percent forecast in May.
“While we have turned the corner and we have now
stronger ground under our feet, we still have substantial uncertainties both due to external developments in global trade as well as internal challenges relative to the sovereign debt and the financial markets,” said EU Economic Affairs Commissioner Olli Rehn.
The Commission almost tripled its forecast for German GDP growth to 3.4 percent, and also raised projections for France, the Netherlands, and Italy. It also saw a slower contraction in the Spanish economy. Its inflation forecast, at 1.4 percent, was slightly lower than the European Central Bank’s.