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EU increases 2010 growth forecast | EU increases 2010 growth forecast |
(about 1 hour later) | |
The European Commission has raised its forecast for growth in the EU this year, after "particularly strong" growth in the second quarter. | The European Commission has raised its forecast for growth in the EU this year, after "particularly strong" growth in the second quarter. |
The commission now expects growth in 2010 of 1.8% in the EU, up from an earlier estimate of 1%, and of 1.7% in the 16-member eurozone, up from 0.9%. | The commission now expects growth in 2010 of 1.8% in the EU, up from an earlier estimate of 1%, and of 1.7% in the 16-member eurozone, up from 0.9%. |
Its projection for the UK is now for expansion of 1.7%, up from 1.2%. | |
Meanwhile the head of the International Monetary Fund (IMF) warned the world labour market was in "dire straits". | |
Dominique Strauss-Khan, managing director of the IMF, said the recession had left a "wasteland of joblessness". | |
"We must acknowledge that the crisis will not be over until unemployment declines significantly," he said, calling growth and jobs the "most urgent problems". | |
'Spill-over' | |
Unveiling its latest growth forecasts, the European Commission said: "While activity is still expected to moderate in the second half of the year, the outlook is for a slightly improved quarterly profile compared to the spring forecast, due to the spill-over of some momentum from the second quarter." | |
However, despite its upward growth revisions, the commission added that the recovery remained fragile and said development in member states was "uneven". | |
The commission's statistics agency Eurostat based its forecast on updated projections for seven of Europe's largest economies - Germany, France, the UK, Italy, Spain, Netherlands and Poland - which together account for about 80% of EU GDP. | The commission's statistics agency Eurostat based its forecast on updated projections for seven of Europe's largest economies - Germany, France, the UK, Italy, Spain, Netherlands and Poland - which together account for about 80% of EU GDP. |
It raised its growth predictions for all seven countries, with the biggest revision made for Germany after its economy grew by 2.2% in the second quarter - its fastest rate in more than 20 years. | It raised its growth predictions for all seven countries, with the biggest revision made for Germany after its economy grew by 2.2% in the second quarter - its fastest rate in more than 20 years. |
In May, it had predicted the German economy would grow by 1.2% this year; now it expects expansion of 3.4%. | In May, it had predicted the German economy would grow by 1.2% this year; now it expects expansion of 3.4%. |
"We now have solid ground under our feet," said EU Economic and Monetary Affairs Commissioner Olli Rehn. | "We now have solid ground under our feet," said EU Economic and Monetary Affairs Commissioner Olli Rehn. |
"We have started scoring again, but there is no reason to shout for victory. We must remain alert and vigilant." | "We have started scoring again, but there is no reason to shout for victory. We must remain alert and vigilant." |
The commission also issued inflation forecasts, projecting inflation of 1.8% in the EU in 2010 and of 1.4% in the eurozone. |