European Commission slashes growth forecast
The European Commission has announced a reduction of its previously estimated growth forecasts for the coming years due to the persistence of low inflation and the weakness of recovery.
The Commission expects real GDP growth in 2014 to reach 1.3% in the EU and 0,8% in the Euro area, as opposed to 1.5% and 1.2% respectively forecasted in August. For 2015, the European Commission anticipates EU GDP to rise to 1.5% as opposed to 2% predicted in August.
Pierre Moscovici, commissioner for Economic and Financial Affairs, Taxation and Customs, said: “We need to act across three fronts: for credible fiscal policies, ambitious structural reforms and much-needed investment, both public and private. We must all assume our responsibilities, in Brussels, in national capitals and in our regions, to generate higher growth and deliver a real boost to employment for our citizens.”
The Commission stated that it expects recovery to remain weak and highlighted the persistence of low inflation. It expects EU inflation to remain at 0.6% in 2014, 1.0% in 2014 and 1.6% in 2016, remaining below the target set at 2%.
The release comes days ahead of the next ECB governing council meeting in Frankfurt on 6 November, raising expectations of further ECB actions.