Seco becomes more upbeat about 2012

The State Secretariat for Economic Affairs (Seco) has raised its 2012 economic growth prediction to 0.8 per cent, up from its December forecast of 0.5 per cent.

The government’s group of experts said in its spring forecast that the chances of sliding into recession were “improbable”.

Instead there was a good chance of the economy regaining momentum as the eurozone’s debt crisis eases and domestic demand remains solid, they predicted. Since the start of the year, leading economic data has shown initial signs of stabilisation, among both businesses and consumers.

“This indicates that the bottom of the economic cycle has been reached,” Seco said in a statement on Thursday.

For 2013 it forecasts gross domestic product growth of 1.8 per cent, instead of its previous 1.9 per cent. But unemployment is unlikely to recover just yet, warned Seco. It expects a rate of 3.4 per cent for 2012 and even 3.7 per cent in 2013. In 2011 it was 3.1 per cent.