Ireland to record highest growth of any EU economy this year at 4.6pc

But it slashed its growth forecast for the Euro area, and predicts no near term let up to high unemployment and low inflation.

The latest economic indicators from the Commission are that the Euro Area will avoid a new currency wide recession this year, but only just.

In its autumn estimates, Brussels said the euro zone’s economy will expand by 0.8pc this year, 1.1pc next year and by 1.7pc in 2016.

Previous guidance was for growth of 1.7pc next year.

“The slowdown in Europe has occurred as the legacy of the global financial and economic crisis lingers,” said Marco Buti, the director general of the Commission’s economics department.

“We see growth … coming to a stop in Germany … protracted stagnation in France and contraction in Italy,” he said in a statement on the forecasts for 2014 to 2016.

Inflation will be 0.5pc this year, 0.8pc in 2015 and 1.5pc in 2016, the Commission said.

The European Central bank has a target for inflation to be in or around 2pc.

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