Source Pravda.Ru

EU to grow 1.2% in 2002

Private consumption is expected to see the European Union through the worst of its economic crisis, as analysts predict a growth rate of 1.2% for the current year.

According to the European Forecasting Network, private consumer habits are a basic factor in the economic recovery of the European Union, after a period of stagnation. This organism, co-financed by the European Commission, forecasts that consumer growth will continue during the year at 1.8%, translated into a growth rate of 2.2% for 2003.

Retail commerce and industrial development are also showing signs of recovery in various EU countries, while it is believed that inflation should not rise above the 2% benchmark imposed by the European Central Bank. The instability of oil prices will prove a deciding factor as to whether the rate maintains throughout 2003 or rises slightly, as feared by some analysts.

Consumer confidence indices point towards a 0.6% rise over the final quarter of 2001, while certain indicators are less optimistic, namely the figures regarding private sector investment, which predict that this sector should fall 1.4% in 2002 and will not recover fully until 2004, whereas unemployment should remain stable at 8.4%, falling to 8.1% in 2003.