The European Commission sees a lower european growth in 2017 and more inflation – Investing.com Spain

BRUSSELS/MADRID (Reuters) – growth in the eurozone will slow down next year as its main engine, the internal demand, will lose strength as a result of a likely increase in energy prices, while inflation may rebound, said Wednesday the European Commission.

The university considers the complex political landscape and global economic forecast for a future period of growth “modest” in the eurozone, despite the observed improvements in the labour market and private consumption.

“The political uncertainty, slow growth outside the EU and the weakness of global trade are holding back the growth prospects,” it said in its autumn forecast published on Wednesday.

The Committee raised slightly the forecast of economic growth of the eurozone by 2016, from 1.6 per cent to 1.7 per cent, but lowered by 1.8 per cent to 1.5 per cent in 2017, while 2018 announced a forecast of advance of 1.7 percent in the GDP. In 2015, the growth was 2.0 percent.

The growth of GDP in the EU as a whole should follow a similar pattern, said the Commission, and is expected to reach 1.8 percent this year, 1.6 percent in 2017, and 1.8 percent in 2018 (compared to 1.8 per cent in 2016 and 1.9 per cent for 2017 projected in its spring forecast).

In terms of inflation, the European Central Bank is raising up to place it below but close to 2 percent over the medium term, repuntaría a 0.3 per cent this year from zero last year and would rise to 1.4 per cent in 2017 and 2018, according to the Commission.

In their comments on the report, the Commission stated that they have increased have increased in the last few months and have an orientation clearly bearish, especially following the vote of the Uk to leave the EU, which has led to uncertainty and “may be considered an indicator of greater political risk in the current political situation unstable”.

there have Also been external risks, according to Brussels, such as greater economic uncertainty in China and the risk of aggravation of geopolitical conflicts, in a report published on the same day of the unexpected victory of republican Donald Trump in the presidential elections of the USA, which, according to the analysts adds a great deal of concern to the international scene.

“on the other hand, the european economy will no longer be able to rely in the coming years on the exceptional support it has received from external factors, such as the fall in prices and the depreciation of the currency”, he added.

On the plane positive, the agency indicated that it anticipates that employment in the euro area and the EU will increase by 1.4 percent this year, “more than at any other time since 2008″, while acknowledging that “continues to reign the slack in the labour market”.