The European Union Commission released its autumn economic forecasts last week. As widely expected, based on the recent trends in the economy and the receding political risks, the euro area economy is expected to continue maintaining its bullish momentum.
Regional growth and inflation figures were also significantly higher which is expected to push the overall recovery in the euro area to new heights. The EU Commission’s forecasts remain broadly in line with the overall view that the euro area’s economic recovery was firmly entrenched.
Despite some disappointments to inflation, consumer prices are also expected to rise in the medium term outlook, but a lot remains hanging on the wage growth. According to the EU commission’s report, there was a significant amount of slack in the economy despite the unemployment rate in the EU falling to an eight-year low. Here’s a quick recap of the EU Commission’s autumn forecasts.
Real GDP expected to rise 2.2% in 2017
According to the commission, the euro area economy was forecast to rise at the fastest pace in nearly a decade. The commission forecast that real GDP would rise 2.2% this year which was a big revision from the spring forecasts of 1.9%.
Source: European Commission
Economic growth is expected to rise 2.1% in 2018 and 1.9% in 2019. This was a modest revision from the spring forecasts of 1.8% and 1.9%. The commission said in its report that growth in the Eurozone surpassed expectations. But at the same time, the commission warned that growth could possibly ease in the longer term.
Private consumption, stronger global trade, and falling unemployment levels were attributed as the biggest drivers of growth in the Eurozone’s economy. The commission also said that there was a broad overall improvement in the regional economies as well and not just Germany.
According to the preliminary GDP reports, the Eurozone economy was seen to expand at a pace of 2.5% on an annual basis during the third quarter of 2017.
