Commissioner: European economy reached turning point

PanARMENIAN.Net - The European Commission has said the European economy has reached a turning point, with growth of 0.5% predicted in the second half of the year, according to BBC News.

In its closely-watched autumn forecast the Commission predicted 1.4% growth in the EU next year and 1.9% in 2015.

"There are increasing signs that the European economy has reached a turning point," said Olli Rehn, commissioner for economic and monetary affairs.

The Commission publishes forecasts three times a year.

Despite the upbeat prognosis, the Commission said it expected the recovery to be gradual.

"While the financial market situation has improved significantly and interest rates have declined for vulnerable countries, this has not yet fed through to the real economy," Rehn said.

In the eurozone - the 18 member states which use the euro - the Commission predicted growth of 1.1 per cent next year, down from its May forecast of 1.2%, and 1.7% in 2015.

The Commission blamed weaker investment and the fact it expected inflation to stay below the central bank target over the next two years.

It also expects unemployment in the eurozone to improve only gradually, expecting it to stay around current levels for two more years and only dropping to 11.8% in 2015.

On an individual country basis, the Commission significantly upgraded its forecasts for the UK from 0.6% to 1.3% for this year and from 1.7% to 2.2% for next year.

"2013 has thus far exceeded expectations and the outlook is quite bright," the report said on the UK.

The Commission also expects Greece's recession this year to be slightly less severe than its earlier forecast, predicting a fall in growth of 4% this year compared to its earlier prediction of a 4.2% fall.