“Grappling with the aftermath of a profound financial and economic crisis, the EU economy is set to pick up speed only very slowly in the course of this year,” commented Marco Buti, Director General for Economic and Financial Affairs at the European Commission, in the organization’s spring economic forecast report. “After having turned positive in the second half of this year, real GDP growth is projected to gain traction in 2014 as investment and consumption are set to take over as the main growth engine.”
This relatively gloomy forecast is supported by a series of economic indicators released so far this year that paint a picture of a Europe that is not only still in contraction, but is sliding deeper into it. Eurostat, the statistical office of the EU, reported at the end of April that unemployment across the euro area increased to 12.1 percent in March, 1.1 percentage points higher than the year-ago period.
A separate report showed that business investment fell to recent lows in the fourth quarter of 2012. Europeans have faced at least three years of severe debt crisis and five consecutive quarters of shrinking economic growth through the end of 2012, and Markit’s manufacturing PMI report showed that the downturn deepened at the beginning of the second quarter of 2013.