International AFP
growth in the euro area is threatened by” external risks “as the slowdown in China and internal factors such as ‘Brexit’, estimates the European Commission, which lowered its forecast for GDP growth in 2016 and 2017.
in its spring economic forecasts, published on Tuesday, the Commission forecast an expansion of GDP in the euro zone of 1.6% and 1.7% dek in 2016 and 2017, respectively, one tenth less than in the previous publication in February.
“the economic recovery continues, but the context world is less favorable “, estimated Valdis Dombrovskis, Vice President of the Commission, said in a statement.
According to the spring forecast, economic growth will remain” broadly stable “in most members of the bloc, although in the euro area “remain uneven”, he points in both the European Commissioner for Economic Affairs, Pierre Moscovici.
But dominates a “great uncertainty” about these forecasts by external risks, such as the “slowdown growth in emerging markets, particularly China, “which may have” repercussions or a stronger amplitude than expected “.
the geopolitical uncertainty” remains high “, with a more serious threat than expected in European economies.
But there are also “risks linked to the evolution of the internal situation in the EU which are considerable,” especially “the uncertainty of the referendum [June 23] on the permanence Britain in the Union “.
low energy prices continue to weigh on inflation, estimates the Commission. In the remainder of 2016, “inflation will be close to zero”, which shrink the index to only 0.2%, far from the goal of maintaining the evolution close but below 2%.
“the upsurge in prices should be more marked in the second half, given that energy prices increase progressively and that domestic prices recover from the effect of domestic demand,” the EU executive, estimating that by 2017 inflation will reach 1.4%.
as for unemployment, forecasts predict that fall below the threshold of 10% in 2017, when it reaches 9.9%. This year, the Commission estimates that unemployment will be 10.3% (estimates in February were 10.5% in 2016 and 10.2% in 2017).
“Our growth prospects will increasingly depend on the possibilities we think for ourselves, “said Dombrovskis.
According to the Commission,” growth will depend on domestic demand “as exports from the euro zone will continue to fall this year and the trade balance “be neutral in 2017″.
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