Winter forecast 2012-14: EC
- Leading indicators suggest that GDP in the EU is now bottoming out.
- Economic activity expected to gradually accelerate.
- The pick-up in growth will initially be driven by increasing external demand. Domestic investment and consumption are projected to recover later in the year, and by 2014 domestic demand is expected to take over as the main driver of strengthening GDP growth.
- The weakness of economic activity towards the end of 2012 implies a low starting point for the current year. Combined with a more gradual return of growth than earlier expected, this leads to a projection of low annual GDP growth in 2013 of 0.1% in the EU and a contraction of -0.3% in the euro area.
- The current weakness in economic activity is expected to lead to an increase in unemployment this year to 11.1% in the EU and 12.2% in the euro area.
- As the impact of higher energy prices on inflation is expected to wane, consumer-price inflation in the EU is forecast to decrease gradually in the course of 2013 and to stabilise at around 1.7%% in the EU and 1.5% in the euro area next year.