European Commission raises 2010 estimate
The European Commission has increased its estimate for economic expansion in the European Union in 2010. This increment is the result of the strong growth from April through June. The executive body of the EU now forecasts economic growth of 1.8% in the EU this year. Previously it forecasted a 1% growth rate for 2010. The commission estimates that
the Euro area will expand by 1.7%, in comparison to the prior forecast of 0.9%.
It declared that the economic improvement is still weak. There are major discrepancies in the development of the member states. The European Commission forecasts inflation of 1.8% in the European Union and 1.4% in the 16-nation Euro area. "Economic activities will probably remain subdued in the last two quarter of 2010. However, the prospects for the second quarter have improved slightly in comparison to the spring estimate. This improvement is the result of the positive developments from April through June,” the EC noted.
EU gross domestic product
The EC’s statistical office Eurostat based its revision on renewed forecasts for the German, French, UK, Italian, Spanish, Dutch and Polish economy. It concerns the seven main countries in the European Union. They contribute for approximately 80% to the EU gross domestic product. Eurostat increased its growth estimates for all seven economies.
The German estimate was raised the most as the German economy expanded 2.2% from April through June. This was boosted by strong exports. The European Commission had estimated that the German economy would expand by 1.2% in 2010. It now forecasts that the German economy will grow by 3.4% this year.
EU economy commissioner Olli Rehn commented: “The EU now has a solid foundation to build on. We have seen some encouraging developments, but it’s too soon to celebrate. It’s crucial to remain watchful and cautious.”