The European Commission on Tuesday raised the euro area growth and inflation forecasts for this year, saying that the Europe’s economy is benefiting from positive economic tailwinds.
In its Spring 2015 Economic Forecast, the executive arm of the European Union lifted the Eurozone growth forecast for this year to 1.5 percent from 1.3 percent seen in February. The outlook for 2016 was retained at 1.9 percent.
The growth forecast for the EU for this year was raised to 1.8 percent from 1.9 percent. The projection for next year was maintained at 2.1 percent.
“Europe’s economies are benefiting from many supporting factors at once,” the Commission said.
“Oil prices remain relatively low, global growth is steady, the euro has continued to depreciate, and economic policies in the EU are supportive.”
The Eurozone inflation projection for this year was lifted to a gain of 0.1 percent from a 0.1 percent fall predicted earlier. The outlook for next year was raised to 1.5 percent from 1.3 percent.
Citing the effects of the fall in energy prices, the Commission said inflation is expected to remain close to zero in the first half of this year.
“Consumer prices should, however, pick up in the second half of the year and even more so in 2016 as domestic demand strengthens, output gaps narrow, the effects of lower commodity prices fade, and the depreciation of the euro triggers higher import prices,” the report said.
The material has been provided by InstaForex Company – www.instaforex.com