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Spring 2015 Economic Forecast: Tailwinds support the recovery

EU News 125/2015

Brussels, 05 May 2015

Economic growth in the European Union is benefitting from positive economic tailwinds. According to the European Commission's Spring 2015 Economic Forecast, these short-term factors are boosting an otherwise mild cyclical upswing in the EU.

Europe’s economies are benefitting from many supporting factors at once. Oil prices remain relatively low, global growth is steady, the euro has continued to depreciate, and economic policies in the EU are supportive.

On the monetary side, quantitative easing by the European Central Bank is having a significant impact on financial markets, contributing to lower interest rates and expectations of improving credit conditions. With the overall fiscal stance in the EU broadly neutral – neither tightening nor loosening – fiscal policy is also accommodating growth. Over time, the pursuit of structural reforms and the Investment Plan for Europe should also bear fruit.

As a result, real GDP in 2015 is now expected to rise by 1.8 % in the EU and by 1.5 % in the euro area, respectively 0.1 and 0.2 percentage points higher than projected three months ago. For 2016, the Commission forecasts growth of 2.1 % in the EU and of 1.9 % in the euro area.

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