by Bocconi Student Finance Society
The European Economy has gone through much scrutiny over the past years. The Eurozone crisis has had a significant impact on the standard of living in Europe as well as the financial wellbeing of the respective countries.
So what is actually happening with respect to the Eurozone situation?
It is possible to claim a recovery is in place simply based on gross domestic product predictions for 2014. Across the European Union, expectations suggest GDP for the current year will stagnate (an improvement from the 0.5% decrease in 2012) and expand by 1.5% in 2014. Although this is a slow recovery, this can be considered an achievement when considering the 18 month long double-dip recession into account. 2014 will see Latvia join the euro area; with predictions of a 4.1% growth. Latvia will join its fellow Baltic states (Lithuania and Estonia) in being the three fastest growing countries in the European Union.
However not all news is good news. Two Eurozone countries will witness a decrease in GDP in 2014. Cyprus’ worries continue with an expected contraction of just under 4% of GDP while Slovenia will see a further decrease of approximately 1% in its GDP. Despite the contraction in the growth of these two countries, this is is still nothing compared to the negative growth experienced in 13 countries by eight countries in the euro zone and ten countries in the European Union.
The slow recovery does not mean we will see a decrease in the unemployment figures of the Eurozone. Forecasts in the area and the EU in general suggest that unemployment will likely stay at 12.2% in 2013 and 11% in 2014. Moreover, with current austerity plans, future job cuts in the public job sector would not be surprising.
So where are the growth opportunities?
So far it seems that with the slow recovery, there are limited growth and investment chances ahead. However, as consumer confidence starts to rise once again, many individuals will be looking to become active investors in Europe. Many market experts predict booms in various industries (such as the Pharma in Eastern European countries or more generally the Shale gas boom), while other professionals claim the possibility of Europe sliding back into recession.
How can we identify the future growth opportunities of the European economy? The Bocconi Student Finance Society would like to help explore these topics further by hosting a conference on Saturday, November 16th with various guest speakers ranging from investment bankers to venture capitalists. To register for free, please go to http://www.bocconifs.com.