Press Release: Commission spring economic forecast 2005 – 2006

Following the deceleration in economic activity in the second half of 2004, growth in the euro area and the EU was expected to return to potential during the course of 2005 as domestic demand gathered momentum. Overall, GDP growth was projected at 1.6% in the euro area and 2.0% in the EU (and 2.1% and 2.3% respectively in 2006). Employment growth was set to accelerate in both the euro area and the EU, facilitating a modest fall in unemployment in 2006. Similarly, public finances were expected to remain broadly unchanged in 2005 with the deficit at 2.6% of GDP in both the euro area and the EU.