EUROPEAN officials are optimistic about economic growth this year and the next, despite last year’s lacklustre performance and the potential for a new economic crisis in Greece.
The 28 member European Union – which includes the UK – grew collectively by just 0.2 per cent year-on-year from July to September 2014.
However, every single EU member state is set to see their economy grow this year, according to the European Commission’s winter forecast. This would be the first year every EU member has seen growth since 2007.
The boost in the forecasters’ optimism is due mainly to easier monetary policy from the European Central Bank and cheaper oil.
“The fall in oil prices and the cheaper euro are providing a welcome shot in the arm for the EU economy,” said commissioner Pierre Moscovici.
Economic activity is expected to pick up moderately to 1.7 per cent for the EU in 2015 and 2.1 per cent in 2016.
Just three months ago the equivalent economic forecasts were 1.5 per cent for this year and two per cent for 2016. For the Eurozone, 2015 growth is forecast to pick up to 1.3 per cent in 2015 and 1.9 per cent in 2016.
Despite all EU members expecting to see growth this year, growth rates still differ considerably between member nations.
The lowest forecast is for Croatia with 0.2 per cent growth expected this year compared to Ireland – the highest – where the economy is expected to grow by 3.5 per cent.
“Following the difficult policy choices governments have made due to the crisis, the effects of reforms are emerging,” said European Commission vice president Valdis Dombrovskis.
“We have to step up the reform momentum to strengthen the recovery and make sure it translates into money in people’s pockets.”
The EU upgrade contrasts with the UK’s downgrade. The UK was forecast 2.7 per cent and 2.5 per cent in 2015 and 2016 respectively. These predictions have been taken down to 2.6 per cent and 2.4 per cent, respectively.