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EU Commission forecasts modest euro zone growth


11-10-2016 11:35 BJT

European commissioner Pierre Moscovici has said the European Union will see a moderate growth in the next two years. However, divergences will remain in the bloc.

"Economic activity is set to expand, as I said, in all EU member states in 2017, and gain momentum in most of them in 2018. Still, growth is set to remain uneven across the EU, [there are] still divergences there. Growth is predicted to decline, to be almost divided by two, to one percent in 2017. This reflects, what we estimate, could be the impact of the Brexit, vote on the outlook, as business react to the current uncertainty by delaying or canceling sometimes investment."

GDP growth in the euro zone is predicted at 1.7 percent in 2016, according to a autumn forecast released by the European Commission. GDP growth in the EU as a whole is expected to reach 1.8 percent.The commission lowered the economic outlook over the next two years, placing growth in the eurozone and EU at 1.5 percent and 1.6 percent respectively in 2017. The forecast picks up slightly in 2018.

Private consumption will remain the key driver of growth throughout 2018, with expectations of a growing employment rate and an increase in wages. However, political uncertainty, slow growth outside the EU and overall weak global trade could weigh on growth prospects.

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