UNECE: New European member states will provide growth

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The United Nations Economic Commission for Europe (UNECE) reports that it expects the new members of the European Union to form the main engine of economic growth in Europe for 2005.It predicts that the eight central European states which joined the EU last year will see 4.6% growth, and specifically points to countries such as Czech Republic and Slovenia as high-growth nations likely to push economic growth in Europe.Established European countries face a number of problems, and Germany is especially facing economic challenges. The Bundesbank has already warned that Germany’s efforts to reduce its budget deficit below 3% of GDP are especially dangerous, not least when economic growth for 2005 is likely to be around 1%.Even the UK economy is slowing as consumers run out of cash to spend, with UK growth expected to slow from 3.2% to 2.5%.Overall, the UNECE predicts economic growth at 2.2% across Europe in 2005, with Eurozone countries only managing around 1.8%.