The European Commission suggests — in a late forecast compared to those of many other economists — that the eurozone economy will shrink in 2013, and the EU economy will tick up by only the slightest. The news is proof once again that Europe has not found any concrete and successful means to escape the gravity of the last recession and the austerity budgets that have hurt employment and gross domestic product among almost all member nations.
The EC report said:
The weakness of economic activity towards the end of 2012 implies a low starting point for the current year. Combined with a more gradual return of growth than earlier expected, this leads to a projection of low annual GDP growth in 2013 of 0.1% in the EU and a contraction of -0.3% in the euro area. Quarterly GDP developments are somewhat more dynamic than the annual figures suggest, and GDP in the fourth quarter of 2013 is forecast to be 1.0% above the level reached in the last quarter of 2012 in the EU, and 0.7% in the euro area
The 2013 forecast is wishful thinking, unless something profound happens to radically change the factors that have kept the region in recession.
Douglas A. McIntyre