In the latest Spring Economic Forecasts, European Commission downgrade 2019 Eurozone GDP growth projections slightly by -0.1%. Though, it would be the seventh year of growth in a row. And despite continuing global uncertainties, domestic dynamics are expected to support the European economy. More importantly, the Commission expects growth to bottom in 2019 and pick up again in 2020.
Eurozone projections (Winter forecasts):
- 2019 GDP at 1.2% (downgraded from Winter forecast at 1.3%)
- 2020 GDP at 1.5% (downgraded from 1.6%)
- 2019 HICP at 1.4% (unchanged)
- 2020 HICP at 1.4% (downgraded from 1.5%)
Germany projections
- 2019 GDP at 0.5% (downgrade from 1.1%)
- 2020 GDP at 1.5% (downgraded from 1.7%)
France projections
- 2019 GDP at 1.3% (unchanged)
- 2020 GDP at 1.5% (unchanged)
Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: “The European economy is showing resilience in the face of a less favourable external environment, including trade tensions. Growth is set to continue in all EU Member States and pick up next year, supported by robust domestic demand, steady employment gains and low financing costs. Yet risks to the outlook remain pronounced. On the external side, these include further escalation of trade conflicts and weakness in emerging markets, in particular China. In Europe, we should stay alert to a possible ‘no-deal Brexit’, political uncertainty and a possible return of the sovereign-bank loop.”
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said:“The European economy will continue to grow in 2019 and 2020. Growth remains positive in all our Member States and we continue to see good news on the jobs front, including rising wages. This means that the European economy is holding up in the face of less favourable global circumstances and persistent uncertainty. Nonetheless, we should stand ready to provide more support to the economy if needed, together with further growth-enhancing reforms. Above all, we must avoid a lapse into protectionism, which would only exacerbate the existing social and economic tensions in our societies.”
