EU sees deeper eurozone recession in 2013

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EU sees deeper eurozone recession in 2013

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The European Commission, in its Spring Economic Forecast, has revised down growth figures for the eurozone with worsening contraction for 2013.

“We expect the European economy to stabilise in the first half of this year, GDP growth is projected to turn positive in the second half of this year and to gain momentum next year 2014. Annual GDP this year is now forecast to contract by 0.1 percent in the European Union as a whole and by 0.4 percent in the euro area,” said EU Economics Commissioner Olli Rehn.

Inflation fell to 1.2 percent in the first quarter, but no improvement in the labour market is expected before 2014. Olli Rehn said the financial market has regained health, but this has not been mirrored in easier credit for companies, which has in fact tightened even more in the last few months, which he called a “liquidity trap”.