BRUSSELS (AP) — Europe’s economy will continue to recover through next year, but at a subdued pace that will leave unemployment near record highs, the European Commission said Tuesday.

The commission, the EU’s executive arm, said rising business confidence and strengthening domestic demand are expected to underpin the recovery as governments also slow the pace of austerity measures such as spending cuts and tax increases.

“There are increasing signs that the European economy has reached a turning point,” said the EU’s Commissioner for Economic and Monetary Affairs, Olli Rehn.

Growth, however, is likely to remain too weak to generate many new jobs.

The European Union’s economy is expected to grow 0.5 percent over the second half of the year, leaving it flat for the whole year, and expand 1.4 percent in 2014, according to the commission’s fall forecast. Its last predictions, issued in May, had expected a drop of 0.1 percent in 2013.

The 17-country eurozone is forecast to continue its recovery from recession, from which it emerged in the second quarter. However, over 2013 as a whole, the eurozone is still expected to record a decline of 0.4 percent. For next year, the commission is penciling in 1.1 percent growth, downward marginally from its previous forecast of 1.2 percent.