EU Commission cuts euro zone, UK growth forecasts after Brexit vote
Published 12/07/2016 | 10:14
The European Commission has revised down its forecasts for growth in the euro zone and in Britain after the British vote to leave the European Union, in early estimates unveiled on Monday by the economic affairs commissioner Pierre Moscovici.
Britain will be hit harder after the June 23 vote to leave the European Union, the Commission forecast. It said the cumulative negative impact for British gross domestic product (GDP) would be between about 1 percent and 2.5 percent by 2017.
The Commission has previously forecast British economic expansion this year and next of 1.8 and 1.9 percent respectively.
The euro zone is likely to see its growth cut between 0.2 and 0.5 percent by 2017 because of the referendum vote, Moscovici said.
In May, the Commission forecast euro zone growth in 2016 of 1.6 percent and in 2017 of 1.8 percent.
The European Central Bank has estimated that Britain's vote to leave the EU could reduce euro zone growth by a cumulative 0.3 to 0.5 percent compared to previous estimates over the next three years.
On Friday, in its annual policy review of the 19-country euro currency bloc, the IMF also cut its growth forecasts for the euro zone to 1.6 percent from 1.7 percent in 2016 and to 1.4 percent from 1.7 percent in 2017.