EFN Report Autumn 2013: Economic Outlook for the Euro Area in 2013 and 2014
In autumn 2013, the expansion of world output has slightly accelerated. The recovery in the euro area is partly a result of special effects such as a rebound of construction after a particularly cold winter. Other positive factors, however, are longer lasting. Above all, doubts about the future of the currency union have receded substantially. As a consequence, private households and firms are more prepared to take spending decisions. For these reasons, we have revised upward our GDP forecasts for 2013, to -0.3 per cent lower in 2013 than in 2012 (from -0.5 expected in the summer). For 2014, we expect a GDP growth of about 1.0% that will keep unemployment at similar levels to the ones observed in 2013 (12.3%). Our inflation expectations for 2013 have moderated to a y-o-y rate of 1.5%, and they remain subdued also in 2014, at about 1.4%.