28th Sep 2023

Eurozone economy to bottom out this year

The eurozone economy will reach a low this year, but will accelerate in the coming two years the European Commission predicts.

The commission said in its twice-yearly economic forecast published today (17 November) that GDP growth in the 12 eurozone countries would drop to 1.3 percent this year from 2.1 percent in 2004.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Malta scores low on growth among new EU member states (Photo: European Commission)

But the economy will take an upward swing next year, reaching 1.9 percent in 2006 and 2.1 percent in 2007.

The growth estimates are a bit better for the whole bloc (25 countries) reaching 1.5 percent in 2005, 2.1 percent next year and accelerating further to 2.4 percent in 2007.

The fastest growing economy in the union is Latvia, estimated to grow 9.1 percent this year, followed by neighbours Estonia (8.4%) and Lithuania (7.0%).

Malta is the exception among new EU member states, with just 0.8 percent growth this year – the same as forecast for Germany.

At the lower end of the scale, Italy will see just 0.2 percent growth in 2005, Portugal 0.4 percent and the Netherlands 0.5 percent.

The commission estimated inflation in the eurozone would edge lower in the coming years, from 2.3 percent this year to 2.2 percent in 2006 and 1.8 percent in 2007.

The forecast pointed to "ongoing wage moderation" as an important reason for the drop in inflation rates.

The outlook is remarkable in light of this year’s rocketing oil prices, which went up by 45%.

The commission estimates a further 12 percent increase in oil costs next year, followed by a slight decline in 2007.

The euro-area unemployment rate is expected to fall from 8.6 percent this year to 8.1 percent in 2007.

For the EU as a whole, the profile is similar, from a higher starting point of 8.7 percent this year to 8.1 percent in 2007.

IEA says: Go green now, save €11 trillion later

The International Energy Agency finds that the clean energy investment needed to stay below 1.5 degrees Celsius warming saves $12 trillion [€11.3 trillion] in fuel expenditure — and creates double the amount of jobs lost in fossil fuel-related industries.


How do you make embarrassing EU documents 'disappear'?

The EU Commission's new magic formula for avoiding scrutiny is simple. You declare the documents in question to be "short-lived correspondence for a preliminary exchange of views" and thus exempt them from being logged in the official inventory.

Latest News

  1. Germany tightens police checks on Czech and Polish border
  2. EU Ombudsman warns of 'new normal' of crisis decision-making
  3. How do you make embarrassing EU documents 'disappear'?
  4. Resurgent Fico hopes for Slovak comeback at Saturday's election
  5. EU and US urge Azerbijan to allow aid access to Armenians
  6. EU warns of Russian 'mass manipulation' as elections loom
  7. Blocking minority of EU states risks derailing asylum overhaul
  8. Will Poles vote for the end of democracy?

Stakeholders' Highlights

  1. International Medical Devices Regulators Forum (IMDRF)Join regulators, industry & healthcare experts at the 24th IMDRF session, September 25-26, Berlin. Register by 20 Sept to join in person or online.
  2. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  3. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  4. International Medical Devices Regulators Forum (IMDRF)Join regulators & industry experts at the 24th IMDRF session- Berlin September 25-26. Register early for discounted hotel rates
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Join EUobserver

Support quality EU news

Join us