Monthly government statistics to date suggest that the 2017 general government primary balance target (1.75 pct of GDP in terms of the ESM programme definition) will be met, with the balance of risks tilted to the upside. The Commission's autumn forecasts published today in Brussels are similar to those released earlier by the Croatian government, reports Jutarnji List on November 9, 2017. "It is without a doubt that we are entering a new phase in the European economic recovery".
"After five years of moderate recovery, European growth has now accelerated", EU Economy Commissioner Pierre Moscovici said on Thursday. He added that the investment in the European Union is "picking up" and that confidence in economy has "considerably brightened".
The positive data for the eurozone come after the European Central Bank (ECB) announced last month it was starting to wind down the massive support it has given the 19-member currency zone to help it through the crises of recent years, in view of the "increasingly robust and broad-based economic expansion". Wage dynamics are still constrained and inflation dampened because of slow productivity growth and a slack in the labour market.
But for the first time, risks surrounding the economic outlook are "broadly balanced" instead of "tilted to the down side". This is substantially higher than expected in spring (1.7%).
The Commission also raised its eurozone growth forecast for next year to 2.1 percent from 1.8 percent and said growth in 2019 is expected to be 1.9 percent.
France, the other eurozone country under a deficit procedure, will also decrease its deficit, to 3 percent this year.
Unit labour costs are predicted to rise faster than euro-area average for 2018 and 2019.
Only Italy's economy was in a similarly sluggish state to Britain's, with a forecast of 1.5% GDP growth this year, 1.3% in 2018 and 1% in 2019. But Moscovici insisted that the country is "on the right track" even if it has to "continue efforts to strengthen its economic structures and make the necessary adjustments". The pick-up in growth has been mostly driven by private consumption, spurred by tax cuts, significant hikes in both public and private wages, and low rates of inflation.
Growth estimates are below those provided by the likes of the International Monetary Fund and the Bank of England.
The EU Commission has downgraded its expectations for United Kingdom economic growth, saying its assumptions are even based on there being no change in trading status after Brexit.
"Business investment is projected to remain subdued following a period of heightened uncertainty, while net export growth is forecast to moderate marginally, in line with export markets". Greece is set to exit its bailout era, which started in 2010, next summer.
The 28-nation bloc as a whole will grow by 2.3 percent in 2017, up from the 1.9-percent anticipated in the spring.