The European Commission has warned that, despite hopes that the EU is emerging from recession, growth was likely to remain fragile this year.

Unveiling its latest economic forecasts, the Commission said that, while the EU economy was gradually recovering, it was still facing headwinds.

"GDP is projected to grow at 0.7 per cent in both the EU and the euro area in 2010. The inflation projections also remain largely unchanged at 1.4 per cent and 1.1 per cent in the EU and the euro area, respectively. Uncertainty surrounding these projections remains rife, as recent developments in financial markets illustrate well," the Commission said.

Malta's economy was not included in the forecast because it is considered to be too small to influence the overall EU economic performance. The new forecasts are calculated on the basis of updated projections for France, Germany, Italy, the Netherlands, Poland, Spain and the UK, which together account for about 80 per cent of the EU's GDP.

Commenting on the latest results, the European Economic and Monetary Affairs Commissioner Olli Rehn said it was evident the recovery was still very fragile. "Putting the European economy back on a strong and sustainable path should be our overreaching objective. For this, we need to work hard on two fronts: economic recovery and the consolidation of our public finances," he said.