European Commission upgrades growth forecast for eurozone

The European Commission (EC) significantly upgraded its eurozone growth forecast for 2015 yesterday, citing cheaper oil prices, the European Central Bank (ECB) monetary stimulus program and the reduced value of the euro against other major currencies boosting European exports.

"The near-term outlook for the European Union economy has clearly improved. After hitting a soft patch last spring, gross domestic product (GDP) growth in the EU picked up again towards the end of 2014," Marco Buti, Director General of Economic and Financial Affairs from the EC said in a report.

The EC now forecasts growth in the eurozone to increase to 1.5 percent from its previous forecast of 1.3 percent in February, according to the report. The commission based its forecast on the three aforementioned factors that ultimately lead to "increased real household income and improved consumer confidence."

But Buti emphasized the long-lasting negative legacy of economic crises means that action must be taken to support the recovery. He advocated "growth-enhancing structural reforms, re-orienting public expenditures toward more growth-enhancing investment and the continued pursuit of fiscal responsibility."