The euro-zone economy is set to grow by 1.4% this year and by 2.9% next year, the EU Commission said this week, adding to signs already noted from Germany and the European Central Bank that recovery has replaced the of weakness at the end 2001.
The Euro area economy contracted in Q4 2001, but a gradual recovery is shaping up as confidence returns, depleted inventories are rebuilt and international trade picks up, reads the Commission’s report.
For the whole 15-nation European Union, the Commission forecast growth in 2002 of 1.5% and 2003 growth of 2.9%, following 1.6% last year.
“The collapse of international trade proved to be worse than initially foreseen, but the confidence shock caused by the terrorist attack on 11 September appears to have been short-lived. Against all expectations the US economy did not contract in the last quarter of 2001 thanks to robust private consumption.
“The Japanese economy remained plagued by deep-rooted structural problems in its financial and corporate sector. International trade which did not increase in 2001 for the first time in 20 years, is now resuming gradually as confidence is returning. In 2003, international trade is set to expand by about 7%. It will be a main driving force for getting the world economy into a higher gear,” says the EC half-yearly report.
