Economic growth has been modest in 2013 but will gather momentum in 2014 and 2015. The on-going fiscal contraction and low consumer and business confidence have been creating strong headwinds, but are assumed to diminish during 2014. Gradual labour market recovery, debt deleveraging and gains in asset prices will underpin consumption and residential investment growth. Easing credit conditions and ample corporate cash flow will support increasing business investment.

Japan’s recovery from its 2012 recession is being driven by strong export growth, consumer spending amid rising confidence and employment, and a rebound in business investment. The expansion, which is being supported by strong monetary stimulus and a fiscal package, is expected to continue. However, fiscal consolidation, including the consumption tax hikes in 2014 and 2015, is projected to slow output growth to around 1½ per cent in 2014 and 1% in 2015. The sustained recovery will help push inflation toward the 2% target.

Economic activity is projected to recover in 2014 and 2015 as confidence improves further, financial market fragmentation declines and fiscal consolidation eases. The pace will remain moderate though, with deleveraging, weak bank balance sheets and tight credit conditions bearing on economic activity, especially in the vulnerable countries. High unemployment and large margins of excess capacity will recede only slowly and inflation will therefore remain subdued.

Economic growth is projected to strengthen, supported by domestic demand. Real wage gains and low unemployment should sustain consumption growth while improving confidence in the euro area recovery and low interest rates are expected to boost investment spending. Exports will accelerate gradually as the recovery takes hold in the euro area and emerging market economies strengthen again. The current account surplus may shrink to 5½ per cent of GDP in 2015. The unemployment rate is projected to fall to 5% at the end of 2015, generating some inflation pressure.

Economic growth is projected to rise gradually from the trough in the level of real GDP reached in the first quarter of 2013 to about 1½ per cent in 2015, given less fiscal consolidation and improving economic prospects in the euro area. The national unemployment rate should stabilise slightly above 11% in 2014 before declining slowly. Despite VAT hikes, inflation pressure is likely to remain subdued.

Italy is exiting recession and growth is projected to rise through 2014-15 as fiscal consolidation eases. However, economic slack will remain large. The return to growth is supported by exports, which are projected to gain further momentum in the next two years as foreign demand accelerates. Domestic demand will gain momentum during 2014 as investment turns round. Unemployment is set to remain high as the impact of rising demand is likely to initially increase average working hours of persons already employed. Cost and price pressures will stay weak.

Economic activity has picked up and broadened, supported by a turnaround in private sector confidence, continued monetary stimulus, a policy-induced recovery in the housing market and a more gradual pace of household and public sector deleveraging as automatic stabilisers operate. Growth is projected to strengthen further in 2014 and 2015, mainly supported by an upturn in gross fixed investment and exports. Despite exceeding the inflation target of 2%, headline inflation is projected to fall gradually in the next two years.

Growth is projected to strengthen through 2014 and 2015, led by exports and business investment. Improving exports result from the recovery in foreign markets and steps firms are taking to expand into the fastest-growing markets and enhance competitiveness, while business investment should be supported by declining spare capacity and cheap and readily available credit. Residential investment is likely to weaken since the housing stock seems greater than underlying demand. Projected growth should be enough to absorb the small degree of remaining excess capacity by end-2015, and the inflation rate should increase to near the 2% target rate.

Growth should remain moderate at 2½ per cent in 2014, before gradually accelerating toward its potential rate of 3% in 2015. The slower pace of mining investment should be offset by the gradual strengthening of non-mining sectors, which will benefit from recent improvements in confidence, the currently lower exchange rate and expansionary monetary policy.

GDP growth is set for a moderate but steady recovery. Export market growth is projected to pick up and it will spill over to private investment as confidence improves and financing conditions remain generally favourable. Private consumption remains subdued on account of slow employment growth, weak real incomes and on-going deleveraging, but will pick up towards the end of the projection period.

Activity is gradually accelerating as world trade strengthens and monetary conditions remain supportive. However, fiscal consolidation, subdued household income growth and a weak housing market will all weigh on domestic demand. The unemployment rate will stabilise in the course of 2014 but, reflecting the sizeable output gap and wage moderation, underlying inflation will decline further.

After a period of strong economic growth, domestic demand, notably investment, is cooling and export markets remain weak. Consumer confidence and wage growth have started to trend down, though retail sales have been resilient so far. GDP growth is projected to fall below potential growth, but then pick up gradually to around 5% by 2015 as trading partners’ growth increases.

An erratic export-led recovery started in early 2013, after six quarters of contraction. Growth is expected to gather pace in 2014, as fiscal consolidation will make a pause and external demand accelerates. The recovery will be sufficiently strong to gradually narrow the output gap, although unemployment will decrease only marginally due to an unwinding of labour hoarding.

Growth is projected to continue to pick up as domestic demand, supported by low interest rates and improved confidence, gains momentum, and as exports accelerate on the back of strengthening external demand. Employment growth will gradually increase in 2014, contributing to a fall in the unemployment rate.

Output fell in the first half of 2013 but growth is projected to pick up gradually, as wage growth and falling unemployment support private consumption. Headline inflation is expected to decline in 2014 as the impact of the liberalisation of subsidised electricity prices vanishes.

The economy is slowly coming out of recession. External demand is strengthening, although flat household purchasing power, weak consumer confidence and declining employment weigh on consumer spending. Growth will gather pace as the international environment brightens, pushing up exports, restoring confidence and eventually bolstering investment.

Growth is expected to turn positive in the course of 2014 and to strengthen in the following year as competitiveness improves further, world trade expands and investment rises. However, the required fiscal consolidation and weak bank balance sheets will restrain domestic demand. Very high unemployment will persist, keeping inflation negative.

The on-going recovery is projected to continue, though at an uneven pace owing to deleveraging and supply-side impediments. While further cuts in administered energy prices will moderate headline inflation for a few quarters, inflation expectations are still above target, although they are declining, and cost pressures will tend to raise price pressures afterwards. Robust export growth throughout will lead to a rising current account surplus.

The economy continues to recover, thanks to stronger consumer spending and tourism receipts. Declining unemployment and a foreign trade surplus are also signs of improvements. Growth is projected to increase as residential construction rebounds and investment in large energy-related projects picks up. As a result of this upswing, the slack in resource utilisation should be fully eliminated in 2015.

Ireland is successfully emerging from its post-crisis adjustment programme. Economic activity is showing signs of revival and is projected to gradually strengthen in 2014-15. Growth will continue to be led by exports, with private consumption making a rising contribution. Business investment is also projected to expand, reflecting Ireland’s attractiveness for foreign direct investment. The unemployment rate will continue to decline, aided by the broadening of the recovery to more labour-intensive sectors.

Against a backdrop of steadily improving external demand, new offshore natural gas production will provide an additional boost to output growth. Fiscal consolidation will restrain domestic demand, particularly in 2014. Inflation is currently low, but relatively tight labour and product markets may soon bring some price pressures.

Output growth is projected to pick up to around 4% in 2014-15 despite headwinds from a high level of household debt and a weak property market. Stronger growth, led by a rebound in exports and business investment, is expected to boost inflation from around 1¼ per cent toward the midpoint of the central bank’s target range of 2.5% to 3.5%.

Growth will continue to pick up in 2014 as the euro area gradually recovers and the pace of fiscal consolidation lessens. In 2015, growth and the unemployment rate are projected to stabilise even as the new EU VAT regime for e-commerce bears on competitiveness and a higher VAT rate slows demand. The wage indexation system could transmit the price effects of the VAT increase to wages.

The economy slowed abruptly in the first half of 2013, principally due to the delayed effects of weak export demand spilling over to the rest of the economy, thereby hurting consumer and investor confidence. As external conditions improve and government expenditure is stepped up, growth should rebound in 2014 and 2015.

The Netherlands is in a protracted recession mainly owing to private and public sector deleveraging. Declining real house prices, falling real incomes and growing unemployment are holding back household consumption while overstretched balance sheets of banks and heightened risk have led to tight credit conditions. Sizeable fiscal retrenchment has further weakened activity. Growth is projected to resume only gradually, and inflation is expected to recede significantly owing to the substantial economic slack.

The economy is projected to expand as post-earthquake reconstruction drives robust investment and strengthening labour markets support consumption. A post-drought rebound in exports will be tempered by the sluggish global recovery and strong currency. Inflation is expected to rise as earthquake rebuilding stretches resources, pushing up costs.

The mainland economy is projected to expand robustly over the next two years, led by non-petroleum exports, while housing investment will slow. Consumption will remain solid on the back of sustained wage and employment growth. Inflation picked up recently, after having remained surprisingly low with respect to cost pressures, but it is not projected to exceed the central bank’s target.

GDP growth is projected to gain momentum with both exports and domestic demand strengthening over the projection period. Yet slack will hold inflation pressures down for some time before price increases rise to above 2 per cent in 2015.

Against the background of on-going fiscal consolidation, the economy continued to contract in 2013. As global conditions improve and domestic demand recovers, growth should resume slowly, with marginally positive growth projected for 2014. Following recent improvements in the labour market, the unemployment rate is expected to continue a gradual decline throughout the forecasting horizon. As economic slack remains sizeable, inflation is set to remain very low. The current account has moved into surplus, reflecting in part improvements in competitiveness, but also very weak domestic demand.

Growth is projected to strengthen as higher export market growth boosts investment and exports, especially in the automotive industry. Private consumption will continue to grow, but is likely to face headwinds due to unfavourable conditions in a labour market characterised by high and persistent unemployment. Budgetary measures needed to reach a targeted fiscal deficit below 3% of GDP in 2014 will damp domestic demand.

GDP growth is projected to remain negative through 2014. Delays in bank resolution together with continuing fiscal consolidation and deleveraging by the over-indebted corporate sector will be a drag on demand. Domestic demand is expected to slowly pick up towards the end of 2015. Improving conditions in world markets will stimulate exports. Despite the recent rise in indirect taxes, inflation will remain subdued due to the large degree of slack. Indeed, unemployment is likely to rise further.

Improving growth in export markets, gains in market share and the stabilisation of private domestic demand will help to foster a weak recovery in 2014 and 2015. However, fiscal consolidation and tight credit conditions will remain a drag on growth. The unemployment rate is expected to peak in 2013 before gradually declining as growth picks up. Continued large economic slack will keep wage and price pressures subdued.

The economy has lost momentum, but is set to recover gradually as world trade picks up and as stronger exports and improving business confidence spark a revival in business investment. The unemployment rate is projected to continue to fall, but with ample spare capacity inflation will remain subdued.

Economic growth is expected to pick up steadily as external demand starts supplementing domestic spending. Exit from deflation is proving protracted as a strong Swiss franc and only a slow take-up of economic slack are both holding down price pressures. Despite employment gains, unemployment is not projected to fall significantly until 2015.

Growth strengthened in the first half of the year, driven by a surge in public infrastructure and robust private consumption. Since May, international capital market turbulence has pushed interest rates up and the exchange rate down. Financing and credit conditions nonetheless remain supportive and export growth should increase as global demand recovers. Growth is projected to pick up to around 4% in 2014 and 2015.