European Productivity Growth Since 2000 and Future Prospects

Abstract

This article revisits the issue of Europe's growth slowdown, taking into account the latest experiences from the recession and the debt crisis since 2008. There are few, if any, signs of even the beginnings of a reversal in the slowing growth trend, which is primarily driven by the weak productivity performance in most European countries. Recently, slow productivity growth has broadened from the services sector to the goods sector for most European economies. Output growth projections out to 2025 show a deceleration in Europe’s growth trend compared to the pre-recession period, and even compared to the latest period, 2006- 2012, there are no signs of significant acceleration in the growth trend. Demographic structures and continued slow total factor productivity growth are both dampening trend output growth, although there will be large variation between different EU economies.

Keywords

• europe economy
• productivity
• european union