Tuesday, 20 February, 2018

European Commission: Greek economy to grow by 2.5% in 2018 and 2019

GETTYThe European Union’s statistics office Eurostat estimated that euro zone growth was 2.5 GETTYThe European Union’s statistics office Eurostat estimated that euro zone growth was 2.5
Theresa Hayes | 08 February, 2018, 10:08

"The slowdown has been driven primarily by a decline in private consumption growth, due to a squeeze on real disposable incomes", the Commission said, noting inflation rose sharply in 2017 following the 2016 depreciation of sterling.

The continued expansion marks a return to solid growth, European Union officials said, despite a marginal slowdown in the eurozone growth from 2.5% in 2017, which marked the fastest pace in a decade. Economic commissioner Pierre Moscovici said Europe's economy has entered "robust health".

Throughout the EU, GDP is expected to grow by 2.3 percent this year and by 2 percent in 2019 on average. "Unemployment and deficits continue to fall and investment is at last rising in a meaningful way".

On Wednesday, the European Commission maintained its forecasts on Greek GDP growth unchanged for both 2018 and 2019. "Having averaged 1.6 percent in 2017, inflation is projected to rise to 2.1 percent in 2018 and 2.6 percent in 2019".

Britain meanwhile would expand far below that level, at 1.4 percent in 2018 and 1.1 percent in 2019.

Core inflation, which excludes volatile energy and unprocessed food prices, is expected to stay subdued as labour market slack recedes only slowly and wage pressures remain contained.

Given the ongoing negotiations on the terms of the United Kingdom withdrawal from the European Union, our projections for 2019 are based on a purely technical assumption of status quo in terms of trading relations between the EU27 and the UK.

The latest forecast released by EC in its Winter Economic Forecast report is much higher than its previous prediction of 4.8 percent made in the autumn version of the report.

"The downside risks are mainly on the external side".

For the current and next year, the EC has also lowered its forecasts slightly, although they remain high.