03 May 2018

IB Times: EU predicts bright outlook for economy, tougher times for UK heading for Brexit

In its spring forecast, the European Commission said it expects economic growth across the 28-country EU to dip to 2.3 percent this year, from last year's decade-high rate of 2.4 percent. Next year, it expects a further easing to 2 percent. For the 19-country eurozone, the Commission forecasts the same levels of growth this year and next.

Pierre Moscovici, the commissioner responsible for economic matters, said the forecasts are further evidence that the that has ravaged the eurozone and many of its members, notably Greece, is now past.

"All indicators are currently flashing green," he said. "Europe has finally turned the page of the crisis."

Still, he said there was no room for complacency and warned of the perils of trade protectionism amid fears that US President Donald Trump will go ahead with plan to impose tariffs on steel and aluminum. Earlier this week, he exempted the EU for a month.

"Protectionism only creates problems and we hope that we can find ways and means of avoiding that," Moscovici said. [...]

The Commission, meanwhile, said Britain will continue to lag the eurozone over the coming years, forecasting growth of only 1.5 percent this year and 1.2 percent next, with the economy hobbled by Brexit uncertainty.

Though the country is due to leave the EU on March 29, 2019, the future relationship between the two remains unclear. In its forecasts, the EU included the important proviso that it was based on a status quo, which is likely to change in light of Brexit developments. [...]

Full European Economic Forecast

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