Eurozone GDP set to rise

City A.M. Reporter
The Eurozone economy is likely to grow almost twice as fast this year as previously thought and is now on solid ground, the European Commission said yesterday.

In its twice-yearly interim economic forecasts for the 27-nation EU and the 16 countries using the single currency, the EU executive said it now expected the Eurozone to grow by 1.7 per cent this year, rather than the 0.9 per cent it forecast in May and up from a 4.1 per cent contraction in 2009.

The Commission also cranked up its previous forecast of the scale of GDP growth in the UK for the whole of this year from 1.2 per cent to 1.7 per cent.

“We now have solid ground under our feet. We have started scoring again, but there is no reason to shout for victory. We must remain alert and vigilant,” economic and monetary affairs commissioner Olli Rehn said.

The Commission forecast is in line with projections by the European Central Bank which said on 2 September it expected Eurozone growth to be between 1.4 and 1.7 per cent this year. However, it warned the recovery remained fragile.