The European Commission expects eurozone GDP to grow 1.2% this year and 1.7% in 2015 following two consecutive years of contraction. However, the 2015 prediction is down from a prior forecast of 1.8%.
On the other hand, the EC upgraded its outlook for Spain to growth of 2.1% next year from a previous estimate of 1.7%.
"Overall, the outlook has improved, but it remains conditional on continued credible action on several fronts at national and EU levels," says the EC's Marco Buti.
The modest growth in the eurozone will help unemployment fall to 11.8% in 2014 and 11.4% in 2015 from 12% in 2013, the EC said.
The commission cut its inflation forecast to 0.8% this year and 1.2% next year - the ECB's target is just under 2% - but it believes that the probability of deflation is low.
The euro is +0.05% at $1.3876.