Old EU 'sluggish' as new countries surge ahead
However, the level of confidence has plummeted from 96.6 points in Q3 to 89.8 points so far this quarter, according to the Institute for Economic Research (IFO).
"These results show that the Euroland economic revival will progress a little slower in the first half of 2005," explained IFO director, Hans-Werner Sinn. The index is based on a survey of 335 economic experts from international corporations and organizations.
The Euroland economy is projected to grow by just 1.5 percent in 2004, compared to around 4.5 percent in the U.S. and around 3 percent in the UK, according to a new report by economists at PricewaterhouseCoopers.
"The Euroland economic recovery is still very fragile, so this is not the time to be raising taxes or cutting spending, or to be tightening monetary policy. Indeed, although the European Community Bank seems likely to keep interest rates on hold for the moment, they need to stand ready to cut rates again to keep the recovery on track if there should be signs that it is faltering," commented the chief economic advisor to PricewaterhouseCoopers, Rosemary Radcliffe.
The new EU accession countries are also expected to continue to grow significantly faster than the EU average. In Poland, growth is expected to average around 4.5 percent in both 2004 and 2005, while in the Czech Republic and Hungary it should pick up from around 3.25 percent in 2004 to around 4 percent in 2005. On the other hand, the report notes that all three countries still face significant challenges in improving the state of their public finances in the medium term. A.Ł.
"These results show that the Euroland economic revival will progress a little slower in the first half of 2005," explained IFO director, Hans-Werner Sinn. The index is based on a survey of 335 economic experts from international corporations and organizations.
The Euroland economy is projected to grow by just 1.5 percent in 2004, compared to around 4.5 percent in the U.S. and around 3 percent in the UK, according to a new report by economists at PricewaterhouseCoopers.
"The Euroland economic recovery is still very fragile, so this is not the time to be raising taxes or cutting spending, or to be tightening monetary policy. Indeed, although the European Community Bank seems likely to keep interest rates on hold for the moment, they need to stand ready to cut rates again to keep the recovery on track if there should be signs that it is faltering," commented the chief economic advisor to PricewaterhouseCoopers, Rosemary Radcliffe.
The new EU accession countries are also expected to continue to grow significantly faster than the EU average. In Poland, growth is expected to average around 4.5 percent in both 2004 and 2005, while in the Czech Republic and Hungary it should pick up from around 3.25 percent in 2004 to around 4 percent in 2005. On the other hand, the report notes that all three countries still face significant challenges in improving the state of their public finances in the medium term. A.Ł.
