BRUSSELS - THE eurozone economy is to make a 'gradual recovery' in coming years reaching 0.7 per cent in 2010 and 1.5 per cent in 2011, but unemployment will stay high, the European Commission predicted Tuesday.

'A gradual recovery is expected with gross domestic product forecast to grow by 0.7 per cent in 2010 and around 1.5 per cent in 2011,' the commission said, as it released its autumn economic forecast.

Previously the commission had expected a 0.1 per cent drop in GDP next year.

Meanwhile unemployment, which traditionally lags growth, in the 16 nations using the euro single currency will stand at 10.7 per cent in 2010 and climb slightly to 10.9 per cent in 2011, Brussels forecast.

'The EU economy is coming out of recession,' EU Economic and Monetary Affairs Commission Joaquin Almunia said in a statement to coincide with the figures. 'However, the road ahead is a challenging one,' he said.

'To maintain momentum and support the sustainability of the recovery, it is essential that we fully implement all announced measures and complete the repair of the banking sector.' -- AFP