August 26, 2019

Trade tensions push down eurozone economic forecast

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The European Commission today downgraded its eurozone economic forecasts for 2019 again amid “prominent” concerns of continued global trade tensions and Chinas expected slowdown.

The downward revision follows a similar move in February, when Brussels expected eurozone growth of 1.3 percent of economic output this year — 60 basis points, or 0.6 percentage points, less than its November forecast.

Today the Commission said that it expects the currency areas gross domestic product to reach 1.2 percent this year. That figure should increase to 1.5 percent next year.

Pierre Moscovici, the Commissions chief for economic and financial affairs, highlighted that, despite the revision, the blocs economy has expanded for seven years in a row.

“The European economy is holding up in the face of less favorable global circumstances and persistent uncertainty,” the Frenchman said in a statement. “Nonetheless, we should stand ready to provide more support to the economy if needed, together with further growth-enhancing reforms.”

“Above all, we must avoid a lapse into protectionism, which would only exacerbate the existing social and economic tensions in our societies,” he added.

Brussels also tweaked its inflation prediction down to 1.4 percent for 2019 and 2020. In February, it had forecast 1.5 percent inflation Read More – Source