Economic growth is expected to almost double in the EU11* countries in 2014, and to continue to strengthen in 2015, according to the
"The economic recovery is strengthening in the EU11, bolstered by the gradual upturn in the EU15** and supportive domestic policies," said
Table omitted. Click here to view: (http://www.worldbank.org/en/news/press-release/2014/07/11/strengthening-recovery-avoiding-risks-in-eu-11)
According to the report, the initial reliance on net export growth, with rising demand from the rest of the EU, is gradually giving way to more balanced growth as domestic demand picks up, notably in
The northern countries of
The report warns that economic growth forecasts in the EU11 are subject to multiple risks, mainly on the downside, as the global financial situation remains fragile. Rising global interest rates coupled with volatile capital markets, or an extended period of regional geopolitical tensions could slow the European recovery and constrain exports, credit, and investment in the EU11.
Economic recovery has started to translate into new jobs, but slowly, the report says. According to Thomas, "EU11 employment began to rise in the second half of 2013, as economic prospects started improving. Given the usual lagged response of employment to changes in output - due to spare capacity and the need for confidence in the outlook - limited net job creation occurred in 2013, but with notable differences across the sub-regions."
Specifically, employment picked up more strongly in the EU11-Continental countries (the
The report notes that many of the economies in the EU11 face the twin challenge of high youth unemployment and rapidly ageing populations. Furthermore, countries in the region with high rates of inactive young people - not involved in employment, education, or training - also tend to be those with the fastest population declines, including
EU11 countries also struggle to equip the next generation with the skills necessary to achieve their full potential, for example, in literacy, math, and science. The persistence of large numbers of inactive youth poses unique risks of creating a "lost generation" of workers.
The report recommends that understanding the cyclical and structural nature of youth inactivity is, therefore, important to mitigate the potentially damaging cycle between youth unemployment and broader economic growth and productivity.
The report contains a 'Spotlight' on 10 Years of EU membership of eight countries in Central and
A second 'Spotlight', EU Membership Structural Policies for
The report's 'Focus Note' on Youth Unemployment in the EU11 is elaborated on in the feature story - Growing Together: Ensuring Young People Benefit from New Growth in
The EU11 RER is a semiannual publication of the
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