EC Lowers Eurozone Growth Outlook
November 07 2019 - 1:53AM
RTTF2
The European Commission downgraded its growth projections for
the euro area as the economy faces a period of very high
uncertainty.
In the Autumn forecast, the EC said on Thursday that the
European economy has entered a protracted period of subdued growth
amid weak global growth, trade tensions and uncertainties over
Brexit.
The single currency bloc is forecast to expand 1.1 percent this
year instead of 1.2 percent estimated previously. Growth is seen at
1.2 percent each in 2020 and 2021. The outlook for 2020 was
downgraded from 1.4 percent.
Inflationary pressures are set to be more moderate than expected
in spring, lowering the inflation forecast for 2019 and 2020 to 1.2
percent, followed by slight uptick to 1.3 percent in 2021, the
commission said.
Germany's economy is expected to see muted growth over the
forecast horizon. GDP is expected to increase by only 0.4 percent
this year, and by just 1 percent in 2020 and 2021.
Spain's growth forecasts were revised downward due to both data
revisions and a weaker growth momentum amid increased uncertainty.
In 2019, the economy was forecast to climb 1.9 percent. For 2020,
growth was forecast at 1.5 percent and at 1.4 percent in 2021.
France's real growth is set to decrease in 2019 before leveling
out a rate close to the economy's potential. Underpinned by
domestic demand, GDP is forecast to grow by 1.3 percent in 2019 and
2020 and then by 1.2 percent in 2021.
The EU said Italy still shows no signs of a meaningful recovery.
GDP is expected to edge up 0.1 percent this year. In 2020, growth
is set to pick up moderately to 0.4 percent on the back of rising
external demand and moderate household spending. For 2021, growth
is seen at 0.7 percent.
Amid Brexit uncertainty, UK's pace of economic growth has been
volatile in 2019. The growth is seen at 1.3 percent this year. Then
growth is forecast to be 1.4 percent in 2020 and 2021.
In the latest Economic Bulletin, released Thursday, the European
Central Bank said incoming economic data and survey information
continue to point to moderate but positive growth in the euro area
in the second half of this year.
The International Monetary Fund on Wednesday warned that there
are signs that slowdown in European trade and manufacturing is
spreading into the rest of the economy.
According to IMF's Regional Economic Outlook for Europe, euro
area is forecast to grow 1.2 percent in 2019 before improving
marginally to 1.4 percent in 2020.
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