European Commission Upgrades Growth Forecasts


Wednesday, February 07, 2018  04.07PM / The Guardian


Europe’s economy is expected to show robust growth this year and next after a better than forecast performance in 2017, according to the European Commission.


In its latest forecasts the Commission said both the eurozone and the wider EU saw GDP grow by 2.4% last year, better than the 2.2% and 2.3% respectively that it predicted in November.


For 2018 the Commission expects a slowdown to 2.3%, although this is higher than the 2.1% it forecast in November. It is forecasting a further decline to 2% in 2019, but again this is higher than the November estimate of 1.9%.


It said:


“This is a result of both stronger cyclical momentum in Europe, where labour markets continue to improve and economic sentiment is particularly high, and a stronger than expected pick-up in global economic activity and trade.”


On inflation it expected a modest pick-up next year:


“Core inflation, which excludes volatile energy and unprocessed food prices, is expected to stay subdued as labour market slack recedes only slowly and wage pressures remain contained. Headline inflation will continue to reflect the significant influence of energy prices and is forecast to rise modestly. Inflation in the euro area reached 1.5% in 2017. It is forecast to remain at 1.5% in 2018 and to increase to 1.6% in 2019.”

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