Cooling down from 2.9% growth last year, EU economies are nevertheless expected to achieve growth rates of 2% this year and 2.1% in 2009. Prospects in the US are darker, with economic growth not expected to exceed a rate of 1.5%, according to the business confederation's Spring Economic Outlook presented on 24 April, four days before the Commission presents its official figures.
This positive outlook is mainly due "a substantial improvement" on labour markets, especially in Germany, said Philippe de Buck, the secretary general of BusinessEurope. Following the creation of more than ten million jobs over the past three years, European companies are confident they can create an additional two million this year, according to de Buck.
"European companies are resilient and they continue to invest, export and create jobs despite all the uncertainties," he said.
The new member states Lithuania, Bulgaria and Latvia top the class with growth rates exceeding 6%, while large member states in particular are likely to experience weaker growth, the business federation estimates.
Following its weak performance in 2007 with only 1.5% growth, Italy is expected to remain at the bottom of the list this year. "Even the projection of annual growth of 0.7% this year could prove to be too optimistic," de Buck stated.
Rising oil and commodity prices as well as the looming recession in the US are considered to be the main obstacles to further growth, according to BusinessEurope.
While de Buck expressed confidence that the current price surges could be attenuated thanks to the euro's strength and better levels of energy efficiency than global competitors, he voiced concern that the recession risk on the other side of the Atlantic "will exert a substantial drag on the European economy over the coming quarters".
De Buck concluded that it was now up to governments "to create the right conditions" to support companies' confidence. One priority is to contain "inflationary pressures", he said. Inflation is due to rise to 2.8% this year, considerably diminishing citizens' purchasing power, but is expected to fall to 2.3% in 2009.
