Press Release - Winter 2017 Economic Forecast: Navigating through choppy waters
All EU Member States' economies set to grow in 2016, 2017 and 2018
Having proven resilient to global challenges last year, the European economic recovery is expected to continue this year and next: for the first time in almost a decade, the economies of all EU Member States are expected to grow throughout the entire forecasting period (2016, 2017 and 2018). However, the outlook is surrounded by higher-than-usual uncertainty.
Real GDP in the euro area has grown for 15 consecutive quarters, employment is growing at a robust pace and unemployment continues to fall, although it remains above pre-crisis levels. Private consumption is still the engine of the recovery. Investment growth continues but remains subdued.
In its Winter Forecast released today, the European Commission expects euro area GDP growth of 1.6% in 2017 and 1.8% in 2018. This is slightly revised up from the Autumn Forecast (2017: 1.5%, 2018: 1.7%) on the back of better-than-expected performance in the second half of 2016 and a rather robust start into 2017. GDP growth in the EU as a whole should follow a similar pattern and is forecast at 1.8% this year and next (Autumn Forecast: 2017: 1.6%, 2018: 1.8%).
Risks surrounding these projections are exceptionally large and although both upside and downside risks have increased, the overall balance remains tilted to the downside.
Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: "The economic recovery in Europe continues for the fifth consecutive year. In these uncertain times, however, it is important that European economies stay competitive and able to adapt to changing circumstances. This requires continued structural reform effort. We also need to focus on inclusive growth, ensuring that the recovery is felt by all. With inflation picking up from low levels, we cannot expect current monetary stimulus to last forever. Therefore countries with high deficit and debt levels should continue bringing them down to become more resilient to economic shocks."
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: "The European economy has proven resilient to the numerous shocks it has experienced over the past year. Growth is holding up and unemployment and deficits are heading lower. Yet with uncertainty at such high levels, it's more important than ever that we use all policy tools to support growth. Above all, we must ensure that its benefits are felt in all parts of the euro area and all segments of society."
The global recovery is expected to gain momentum
Growth prospects for advanced economies outside the EU have improved over recent months, largely due to expectations of fiscal stimulus in the United States, which have resulted in higher long-term interest rates and an appreciation of the US dollar. Growth in emerging market economies is also set to firm up to 2018, although to varying degrees across countries and regions. Overall, this could give a boost to European exports of both goods and services following a weak 2016.
page source http://europa.eu/
