The economic recovery in the European Union continues to make headway with real GDP growth in 2011 forecast at 1.8 percent in the EU and 1.6 percent in the euro area, a slight upward revision compared to the autumn forecast, EU Commissioner for economic and monetary affairs Olli Rehn announced today. ”
After a slowdown of growth in the second half of last year, the EU economic recovery is expected to gain further ground this year,” he told a press conference presenting the EU economic forecast.
However, Rehn warned of the risks to the EU economic growth outlook saying “the consequences of the political changes in the Middle East and North Africa could have a significant impact on the economic outlook.”
“Oil and commodity prices could exceed the assumed levels which would impact on inflation and have a weakening impact on growth. We are living in a relatively high degree of uncertainity both in the political and economical dimensions,” he noted.
Rehn forecast that oil price would be higher than USD 100 per barrel this year.
He noted that the political changes in Egypt and supply disruptions in Libya have pushed oil prices to a two-and-a-half year high at USD 114 per barrel last week. Global demand for oil, he said, will increase by 1.7 percent this year.