European Commission projected EU growth to continue for the seventh year in a row in 2019, with expansion in all member states. But the pace of growth is expected to slow further as “economic momentum at the start of this year was subdued.” Indeed, GDP growth for 2019 was quite sharply downgraded.
For Eurozone:
- 2019 growth is forecast to be 1.3%, versus prior forecast of 1.9%.
- 2020 growth is forecast to be 1.6% versus prior 1.7%.
- 2019 HICP inflation is projected to be 1.4%
- 2020 HICP inflation is projected to be at 1.5%.
For EU:
- 2019 growth is forecast to be 1.5%, versus prior 1.9%.
- 2020 growth is forecast to be 1.7%, versus prior 1.8%.
- 2019 HICP inflation is projected to be 1.6%
- 2020 HICP inflation is projected to be at 1.8%.
Here is the summary table:
The commission also pointed out there is “a high level of uncertainty” surrounding the outlook, and the projections are subject to downside risks. Risks include trade tensions, slowdown in China, global financial markets and emerging markets risks, as well as Brexit.
Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: “All EU countries are expected to continue to grow in 2019, which means more jobs and prosperity. Yet our forecast is revised downwards, in particular for the largest euro area economies. This reflects external factors, such as trade tensions and the slowdown in emerging markets, notably in China. Concerns about the sovereign-bank loop and debt sustainability are resurfacing in some euro area countries. The possibility of a disruptive Brexit creates additional uncertainty. Being aware of these mounting risks is half of the job. The other half is choosing the right mix of policies, such as facilitating investment, redoubling efforts to carry out structural reforms and pursuing prudent fiscal policies.”
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “After its 2017 peak, the EU economy’s deceleration is set to continue in 2019, to growth of 1.5%. This slowdown is set to be more pronounced than expected last autumn, especially in the euro area, due to global trade uncertainties and domestic factors in our largest economies. Europe’s economic fundamentals remain solid and we continue to see good news particularly on the jobs front. Growth should rebound gradually in the second half of this year and in 2020.”
