Brussels - The European Union predicted Friday that the economy of the 17 member countries that use the euro will see its fortunes improve as the year goes by even though it expects the recession to last longer than it previously thought.
In its winter forecast, the EU Commission, the EU's executive arm, said the eurozone is likely to contract a further 0.3 percent this year, in contrast to its prediction last November of 0.1 percent growth.
Across the eurozone, the Commission said the debt crisis and the associated budget tightening continue to weigh on activity - figures last week showed the eurozone contracted by 0.6 percent in the final quarter of 2012 from the previous three-month period. The eurozone has been in recession - officially defined as two consecutive quarters of negative growth - since the second quarter of 2012, when concerns about the future of the euro currency were particularly acute.
Despite what it terms "headwinds," the Commission said it expects the recession to bottom out over the first half of 2013. By the fourth quarter, it forecast that the eurozone economy will be 0.7 percent bigger than the same period in 2012. In 2014, growth of 1.4 percent has been penciled in.