The economy of the European Union (EU) and the eurozone ended on a very weak note in 2002 and continued sluggishness is expected into the first half of this year, according to forecasts from the European Commission (EC).
The EC’s outlook for 2003 predicts that the average eurozone GDP growth rate will be just 1%, muted by the effects of the rise in unemployment on consumption, the protracted fall in stock markets on corporate balance sheets and oil prices on inflation. The EU 15-country average is forecast to show GDP growth of 1.3%.
The UK emerges as one of the strongest countries in the forecasts, with a GDP growth prediction of 2.2%. Only Ireland, at 3.3%, exceeds this.
| GDP Growth 2003 Forecasts |
| |
|
| |
Growth (%) |
| Austria |
1.2 |
| Belgium |
1.2 |
| Finland |
2.2 |
| France |
1.1 |
| Germany |
0.4 |
| Greece |
0.4 |
| Ireland |
3.3 |
| Italy |
1.0 |
| Luxembourg |
1.1 |
| Netherlands |
0.5 |
| Portugal |
0.5 |
| Spain |
2.0 |
| Eurozone 12 average |
1.0 |
| Denmark |
1.5 |
| Sweden |
1.4 |
| UK |
2.2 |
| EU 15 average |
1.3 |
| Source: European Commission, April 2003 |
A more solid average growth rate of 2.3%-2.4% is projected for the euro area and EU next year, when employment creation resumes, investment picks up and the international environment is more supportive. “However, given the high level of uncertainty, a further delay in the acceleration of growth cannot be excluded,” warns the Commission.
Specifically, if the war in Iraq continues for much longer, these forecasts may start to look increasingly optimistic. The EC has compiled these figures on the assumption that geo-political tensions relating to the conflict will have eased by mid-year.
