The EU's Economic Growth Is Slowing

By John S. McClenahen Stressing that inflation is "subdued" and job creation is relatively strong, the 15-nation European Union (EU) is trying to put the best spin on its latest economic forecast for 2001 and 2002. But the fact is that projected economic growth is slower than the 3.4% advance in GDP expected this year. For the 15, the EU forecasts 3.1% average growth in 2001 and 3% in 2002. Higher oil prices account in part for the slowdown. Compared with an average price of US$17.80 per barrel last year and $29 this year, oil prices "could be $30 in 2001 before easing to some $27 in 2002," says the EU. Greece becomes the 12th EU nation to embrace the euro, beginning on Jan. 1, and that coupled with a bit of an investment boom tied to the 2004 Olympics in Athens is likely to produce the EU's only accelerating economy in 2001 and 2002.

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