The European Commission has released downward revisions of its economic growth forecasts for the Eurozone on Wednesday. Spain is among the most affected countries, as its economy is expected to fall by 1.4% in 2013. The EC has also predicted that Spain and France will miss their deficit targets.
Spain is among the countries most affected by the 2013 growth forecast revisions. The official document states that the Spanish economy will contract by 1.4% in 2013, in comparison with Mariano Rajoy government's estimates of 0.5%. The European Commission projects that next year Spanish unemployment will reach 26.2% and that for the next three years the country will not be able to reach its deficit targets
The Spanish economy should return to growth in 2014, rising slightly by 0.8%, but the European Commission also believes that the unemployment rate for that year will still be high at 26.1%.
Projections for the Eurozone are not too comforting either, as the European Commission asserts that the area should grow a mere 0.1% in 2013, compared with the optimistic 1.0% announced in the previous quarter. Portugal and Greece will continue contracting in 2013 and only Ireland, from among EU countries implementing bailout programs, will grow, although less than hoped-for. Germany and France will also see their economies grow below expectations (Germany 0.7%, versus the estimate of 1.2% and France a slight 0.4%).