EU forecast: European economic growth to remain modest

Pierre Moscovici EU Commissioner for Economic and Financial Affairs
Pierre Moscovici EU Commissioner for Economic and Financial Affairs

BRUSSELS, May 3 (KUNA) — Economic growth in Europe is expected to remain modest as its key trading partners’ performance has slowed, according to the European Commission’s Spring 2016 Economic Forecast, released here Tuesday.
As a result, GDP in the euro area is forecast to continue growing at modest rates over the 2015-2017 period. The forecast expects euro area GDP of 1.6% in 2016 and 1.8% in 2017.
GDP growth in the EU is expected to moderate from 2.0% last year to 1.8% in 2016 before reaching 1.9% in 2017.
It said that uncertainty linked to geopolitical tensions remains high and could affect European economies more negatively than currently expected. Abrupt moves in oil prices or financial market turmoil could also dampen European growth.
Additionally, risks associated with domestic EU developments remain considerable, as for instance the uncertainty ahead of the UK’s EU referendum.
Inflation in the EU should rise more significantly in the second half of this year as energy prices gradually pick up, it said.
Presenting the spring forecast at a press conference, Pierre Moscovici, EU Commissioner for Economic and Financial Affairs said: “Growth in Europe is holding up despite a more difficult global environment.” “There are signs that policy efforts are gradually delivering more jobs and supporting investment. But we have much more to do to tackle inequality,” he noted. (end)

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