European Commission cuts growth forecast for eurozone
In its quarterly economic forecasts, the European Union’s executive arm said prices would grow less than previously predicted, pushing the inflation rate further off the European Central Bank’s target of close to but less than 2 percent.
The commission confirmed its prediction that economic growth in the euro zone would slow this year to 1.2 percent from 1.9 percent in 2018.
It also revised down its estimate for next year’s growth, which is now seen at 1.4 percent instead of the 1.5 percent forecast in May.
The weaker economic outlook contributed to a downward revision of inflation expectations, the commission said, cutting its estimate to 1.3 percent for this year and next from the 1.4 percent it previously estimated for both years.
The commission confirmed the economic slowdown in the euro zone was mostly caused by weaker growth in Germany, the euro zone’s largest economy, and Italy, its third largest.
German growth will slow to 0.5 percent this year, in line with earlier predictions, after reaching 1.4 percent in 2018. Growth is expected to return to 1.4 percent next year, less than the 1.5 percent the commission predicted earlier.
Forecasts for Italy remained unchanged, reiterating its economy will barely grow this year, seeing the worst growth rate in the whole EU. Next year’s growth is expected to accelerate to 0.7 percent but remain the slowest in the bloc.
France’s economy will expand 1.3 percent this year and 1.4 percent in 2020, the commission estimated, leaving unchanged its forecast for this year but lowering the estimate for the next, earlier seen at 1.5 percent.