The European Commission maintains its growth forecast for Spain at 0.8% in 2011
Brussels believes it is "unlikely" to relapse into a second recession but warned that the possibility "can not be excluded". The European Commission has not lowered its growth forecast for Spain or the whole of the Euro area despite the financial turbulences of the last weeks.
Brussels (ACN).- The Spanish economy will grow 0.1% in this third quarter, another 0.1% in the fourth quarter and 0.8% for the whole of 2011, according to the European Commission. Brussels has not lowered its growth forecasts for Spain and for the Euro area, despite tensions in the markets and warnings from the IMF. The European Commissioner for Economic and Monetary Affairs, Olli Rehn, considered this Thursday that it "unlikely" to relapse into a second recession, but also warns that the possibility "can not be excluded." Germany will grow more than expected this year, 2.9% instead of 2.6% which was predicted in the spring, while other EU Member States fail to perform as expected, such as Great Britain (which falls on 1.7% to 1.1%), Italy (1% to 0.7%) and France (1.8% to 1.6%).
"Prospects for the European economy have deteriorated, recovery after a financial crisis is often slow and full of pitfalls," admitted the European Commissioner for Economic and Monetary Affairs, Olli Rehn this Thursday. "The sovereign debt crisis has worsened and turbulences in the financial markets are likely to slow down the real economy," Rehn warned. It is "essential to ensure financial stability" and "more important than ever to achieve structural reforms to encourage future growth potential" he said.
"It is expected that growth in the second half of 2011 will be faint, reaching an almost stagnation state at the end of the year", said Rehn. However, the European Commission maintains its growth forecasts for the Euro zone made in last spring, which suggested that the 17 members of the single currency area will experience a growth of 0.2% in the third quarter and a 0.1% growth in the last three months of the year, marking a 1.6% increase over the whole of 2011. However, Rehn reduced the growth forecast for the entire European Union, passing from 1.8% to 1.7%.
The European Commission also maintains the growth perspectives for Spain, which would grow 0.8% for the whole of 2011. Inflation rate in Spain for the whole of 2011 will be 2.9%; the same rate expected for the whole of the EU, but almost half a percentage point above the 2.5% expected in the euro area.