This year economic growth has accelerated to 2.7 percent in the EU and to 2.5 percent in the Eurozone. According to the Commission growth is mainly driven by internal demand, in particular by investment, and has not been that strong since the year 2000. In view of this favourable business climate the labour market is gaining momentum too, with the unemployment rate falling to 8 percent and to 7.8 percent in the EU and Eurozone repectively in the month of August.
Although consumer prices were pushed up due to high energy costs, inflation remains at a low level due to increased productivity and global competition. The inflation rate is expected to reach 2.3 percent in both EU and Eurozone as compared to 2.2 percent last year.
Whereas economic growth in 2005 was 1.7 percent in the EU and 1.4 percent in the Eurozone, it will probably reach 2.7 and 2.5 percent respectively this year. Thus, the forecast made by the Commission in spring this year (2.3 and 2.1 percent respectively) is to be corrected. The economy grew particularly strongly in the first quarter with 0.8 percent and with 0.9 percent in the second.
Inflation which stood at 2.1 percent in the EU and 2.2 percent in the Eurozone in spring while being at 2.2 last year, is now forecast to reach 2.3 percent in 2006 in both EU and Eurozone. These figures are based on the assumption that oil prices will remain at 73$ a barrel and the value of the Euro against the dollar will remain at its current price.
The current forecast is the second this year and contains updated data on the EU´s five biggest economies. Also included is Poland as the biggest of the 10 new members which joined in 2004. These six countries account for 77 percent of the EU´s GDP.