EUROPE: December is a month of Christmas spirit, but also a time to reflect on the year that has passed and plan and make predictions for the year to come. According to the European Commissions forecasts on November 5th, the GDP in the European Union will increase by 1.4% in 2014.
The European economy began growing again in the second quarter of this year. Over the past months, there has been positive developments supporting beliefs on for a continued economic recovery.
To name an example, let’s look at Spain. La Expansion, one of Spain’s most known business papers, recently wrote about 100 enterprises in Spain that in total will create more than 32 000 new jobs in Spain in 2014. The outlook for the Spanish economy is looking brighter. Foreign companies are investing in Spain and are expected to create plenty of new jobs. The increase is the largest in the sectors of fast moving consumer goods, new technologies and automotive. The fact that new foreign companies are coming to Spain confirms that investors have new confidence in Spain.
In Europa as a whole, growth in the second half of 2013 is forecast at 0.5 % compared to the same period 2012 in the EU. On an annual basis, GDP is expected to remain unchanged in the EU and to contract by 0.4 % in the eurozone in 2013. But looking ahead, growth is forecast to gradually gather pace, hitting 1.4 % in the EU and 1.1 % in the eurozone in 2014 (1.9 % and 1.7 % in 2015).
Domestic demand is set to gradually become the main engine of growth in Europe. This also against the background of a weakened outlook for emerging market economies.
Olli Rehn, Commission Vice-President for Economic and Monetary Affairs and the Euro: “There are increasing signs that the European economy has reached a turning point. The fiscal consolidation and structural reforms undertaken in Europe have created the basis for recovery. But it is too early to declare victory: unemployment remains at unacceptably high levels. That’s why we must continue working to modernise the European economy, for sustainable growth and job creation.”
Unemployment: The outlook is for a modest decline in unemployment towards 10.7 % in the EU and 11.8 % in the eurozone by 2015. But national differences remain very wide, with unemployment ratios ranging from around 5 % to 27 % this year.
Inflation: Subdued consumer-price inflation is expected to prevail throughout the forecast period. Inflation in the eurozone is expected to be 1.5 % in both 2013 and 2014. In the EU the outlook is for 1.7 % and 1.6 %, respectively.
Public finances: The reduction in general government deficits is set to continue. In 2013, fiscal deficits are projected to fall to 3.5 % of GDP in the EU and 3.1 % in the eurozone. In line with the projections for deficits and growth, debt-to-GDP ratios are still rising and expected to peak in 2014, at around 90 % in the EU and almost 96 % in the eurozone.
With these predictions from the European Commission and La Expasión we will end this year of blogging. As Christmas is arriving, the administrators and writers of this blog will take a short holiday.
We see you back for more news and more information on European opportunities in 2014.
Wish you all a merry, merry Christmas!
The European Commission: EU economic forecast: Gradual recovery, external risks