Cheaper oil, a weaker euro and stable global growth are the main drivers of a brighter outlook for the European Union economy, according to the European Commission. In its quarterly published economic forecasts of main economic indicators for the 28-nation EU and the 19 members sharing the euro, the EU’s executive body forecast a boost both in growth and inflation this year.
The Commission expects eurozone economic growth to reach 1.5 percent in 2015, up from the 1.3 percent forecast of three months ago. It kept its previous forecast of 1.9 percent growth for 2016.
As the economy revives, so does inflation. The European Commission raised its predicted inflation growth rate for this year to 0.1 percent from a predicted decrease of 0.1 percent forecast three months ago. According to the Commission, inflation is forecast to rise 1.5 percent in 2016 instead of the initial forecast of 1.3 percent.
Stronger growth is expected to bring down unemployment in the region as well. The Commission expects an unemployment rate of 11.0 percent this year, down from 11.2 percent last year.
However, the outlook is not so bright for eurozone’s most troubled country, Greece. The European Commission slashed Greece’s growth and primary surplus projections drastically to 0.5 percent. Three months ago the Commission forecast Greece would grow 2.5 percent this year.
According to the report, the positive momentum in Greece has been hurt by uncertainty since snap elections were announced last December, and has continued with a current “lack of clarity” on the policies of the government.
As Greece is runs out of cash and faces the possibility of default, the country is currently trying to reach a deal with its international creditors to secure more loans in exchange for reforms.