PARIS: The eurozone economy is expected to recover steadily in the first quarter of this year with growth of 0.4 percent pulled by industrial production, but then flag slightly, three top forecasting bodies said yesterday.
Threats to this outlook came from a slowing of demand from emerging economies, and tension over Ukraine. But this improvement will have scant effect on high eurozone unemployment, largely because consumers’ buying power has been crimped by austerity measures in some eurozone countries and by the effects of unemployment.
Consumer spending would remain sluggish, the German Ifo, French Insee and Italian
Istat institutes said. But amid concerns that deflation may be stalking the eurozone, the institutes said that inflation was set to pick up slightly.
“Although improving, the pace of the recovery will remain insufficient to significantly reduce the unemployment rate,” they said in a joint report. AFP
