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EU doubles its growth forecasts for 2010

- The new EU growth forecast goes hand in hand with the recovery of world economy and specially the growth of Germany.

“Economic recovery in the European Union, although still fragile, is progressing at a faster pace than previously expected,” stated EU executive in the autumn economic forecast report.

The EU executive hopes that the Euro zone GDP will grow by 1.7% in 2010 compared with 0.9% forecast last spring, while the European Union as a whole will increase by 1.8% compared to the previous 1% forecast.

Brussels argued that this change in sustained by the first half’s “robust performance”, to the increase of industrial exports, economic recovery and global trade, as well as “signs of revival in domestic demand, especially in Germany”.

The European Commission also raised its forecasts for the main European economies, led by Germany, for which a GDP growth of 3.4% is predicted for 2010 (compared to the previous estimate of 1.2%).

In the report, Brussels notes Germany has taken advantage of the business recovery and the expansionary monetary and fiscal policies, culminating in a GDP growth of 2% in the second quarter of the year, which will be the highest since the country’s reunification.

In addition, Poland’s GDP will also increase by 3.4%, the Netherlands 1.9%, that of France by 1.6%, that of Italy by 1.1%, and the United Kingdom 1.7%. Spain will remain as the only main economy in Europe still in recession by the end of 2010.

The European Commission improved the Spanish forecast slightly for 2010, with a decline in GDP of 0.3% compared to the previous 0.4%.

The projections released today by the EU executive are provisional and, unlike those published each spring and autumn, these only include data from the large European economies: Germany, France, UK, Italy, Spain, Holland and Poland, which represent 80% of EU’s GDP.