Sunday 20 August 2017

European Commission lifts Eurozone growth forecast

Pierre Moscovici
Pierre Moscovici
Donal O'Donovan

Donal O'Donovan

The EU thinks the economy here will grow 4pc this year, the fastest in the Eurozone and second only to Romania in the EU27.

The growth forecast is lower than those of authorities here, but the European Commission has typically under estimated growth here since the crash.

The wider Eurozone growth should be a bit faster this year than previously believed and the unemployment rate could be the lowest in a decade, the European Commission said yesterday.

At 1.7pc, growth this year will be lower than 2016 or 2015 for the Eurozone as a whole, however. The updated growth estimates are included in the Commission's formal Spring Economic Forecast. It suggests euro-area growth will be faster this year than previously believed and the unemployment rate could be the lowest in a decade.

For Ireland, the Commission warned that growth here could be knocked off course by the impact of Brexit and any action taken by US multinationals if the US drives through changes to its corporate tax regime.

The Commission thinks inflation will remain low, potentially taking pressure off the European Central Bank which policy makers in Germany and the Netherlands want to tighten monetary policy.

The Commission's forecasts, published three times a year, predict all Eurozone countries will grow this year and next, with Germany, the bloc's largest economy, accelerating to 1.9pc in 2018, and Spain and Portugal expanding much more than previously expected.

"Europe is entering its fifth consecutive year of growth," EU Economics Commissioner Pierre Moscovici said.

"It is good news too that the high uncertainty that has characterised the past 12 months may be starting to ease," he said.

Irish Independent

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