Winter 2014 forecast: recovery gaining ground

The European Commission’s winter forecast foresees a continuation of the economic recovery in most Member States and in the EU as a whole. After exiting recession in spring 2013 and three consecutive quarters of subdued recovery, the outlook is for a moderate step-up in economic growth. Following real GDP growth of 1.5% in the EU and 1.2% in the euro area in 2014, activity is seen accelerating in 2015 to 2.0% in the EU and 1.8% in the euro area. These figures each represent an upward revision of 0.1 percentage points compared with the autumn 2013 forecast. The forecast remains based on the assumption that the implementation of agreed policy measures at EU and Member State level sustains improvements in confidence as well as financial conditions and advances the necessary economic adjustment in Member States, by increasing their growth potential.

It should be noted that the forecast for Portugal is based on the projections prepared in the context of the tenth review of the Economic Adjustment Programme in mid-December, and will be updated during the ongoing eleventh programme review. The forecast for Cyprus was finalised in early February, after the third Programme review and before the fourth quarter flash estimate of GDP became available.

Olli Rehn, Commission Vice-President for Economic and Monetary Affairs and the Euro said: «Recovery is gaining ground in Europe, following the return to growth in the middle of last year. The strengthening of domestic demand this year should help us to achieve more balanced and sustainable growth. Rebalancing of the European economy has been progressing and external competitiveness is improving, particularly in the most vulnerable countries. The worst of the crisis may now be behind us, but this is not an invitation to be complacent, as the recovery is still modest. To make the recovery stronger and create more jobs, we need to stay the course of economic reform».

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