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EC forecasts moderate growth amid global uncertainties for the EU economy
Euro area GDP is forecast to grow by 1.3% in 2019 and 1.6% in 2020 (Autumn Forecast: 1.9% in 2019; 1.7% in 2020). The EU GDP growth forecast has also been revised down to 1.5% in 2019 and 1.7% in 2020 (Autumn Forecast: 1.9% in 2019; 1.8% in 2020). UK GDP growth is expected to remain subdued at 1.3% in both 2019 and 2020, says the European Commission in its Winter 2019 Interim Economic Forecast released today.
The European economy is expected to grow for the seventh year in a row in 2019, with expansion forecast in every Member State. The pace of growth overall is projected to moderate compared to the high rates of recent years and the outlook is subject to large uncertainty. The EU economy is set to continue to benefit from improving labour market conditions, favourable financing conditions and a slightly expansionary fiscal stance.
The UK GDP growth is projected to remain subdued at 1.3% in 2019 and 2020. Expansionary fiscal measures announced in the 2018 autumn budget should provide a stimulus to growth in 2019. This is anticipated to be partly offset by a negative contribution to growth from net trade, with export growth expected to remain weak, in line with slowing growth in external demand, the EC estimate shows. Detailed forecast for the UK can be found here.
Given the ongoing ratification process of the Withdrawal Agreement in the EU and the UK, projections for 2019 and 2020 are based on a purely technical assumption of status quo in terms of trading relations between the EU27 and the UK. This is for forecasting purposes only and has no bearing on the talks underway in the context of the Article 50 process.
European Economic Forecasts – explanatory website