Europe’s economic recovery “is set to be bumpy” and the euro’s weakness will help boost exports, the European Union said.
“The euro-area recovery remains on track although the renewed market turbulence seen over the past two months shows that uncertainty and downside risks remain high,” Marco Buti, the head of the European Commission’s economics department, said in a report released today in Brussels. Commission forecasts show the “near-term growth prospects remain rather subdued, with the recovery gaining traction only towards the end of this year and into next,” he said.
“Euro-area exports will be further stimulated by the recent depreciation of the euro,” the commission, the European Union executive, said in its quarterly assessment of the euro- area economy. The euro has declined 14 percent against the dollar this year and traded at $1.2296 today.
“Euro-area exporters performed well in some key export sectors that acted as powerful export engines,” Buti said. “Their competitive position appears relatively strong, which augurs well for their capacity to exploit the opportunities offered by the recovery in world trade.”