Wednesday , January 20 2021

EC reduces growth forecasts for the years 2018 and 2019



BRUSSELS, November 8 (Reuters) – The European Commission is
declined growth forecasts for the euro area on Thursday
as for the whole of the European Union for the year and
next year and expects to continue the slowdown
in 2020, stating that its projections are exposed
negative risks.

On the other hand, the Community enforcement authority has a slight effect
Forecasts of inflation for this year and next year
but the price growth will slow again in 2020.

The European Commission expects growth
2.1% this year in the euro area, compared to 2.3%
six months and expects GDP to grow
(GDP) of 1.9% in 2019, compared with 2.0% in May. For the year 2020, the EC is
predicts a further slowdown in growth of 1.7%.

For the Union as a whole, its autumn forecasts
growth of 2.1% of GDP this year and 1.9% in 2019.
In May, the EC was expecting a 2.3% growth this year and
2.0% in 2019.

Regarding the two main EU economies,
Germany and France lowered the EC
predictions for the first and the second.

The German GDP growth forecast has fallen
1.7% for this year and 1.8% for 2019
2.3% and 2.1% six months ago.

For France, the growth forecast for 2018 was
1.7% versus 2.0% in May and 1.6% for 2019 against
1.8%.

As for Italy, which the European Commission rejected
Draft budget 2019, which envisages a public deficit of 2.4%
Of GDP, the growth forecast for this year has declined
1.1% versus 1.5% six months ago, while this is for the year
the next was confirmed by 1.2%. For the year 2020, the European Commission expects
Italian GDP growth 1.3%

Her predictions are considerably lower than these
which was chosen by the Italian Government on which it is deemed to be
growth of 1.5% next year and 1.6% in 2020.

"Economic growth in Europe has peaked
2017, "says Marco Buti, General Manager of the company
Economic and Financial Affairs in its presentation
declining forecasts.

"In the absence of major shocks, GDP should continue
to grow a blue tempo, but the trajectory is ahead of us
a number of insecure and interconnected risks and risks',
or prevents tension in the trade,
turbulence in emerging markets and risk
Brexit without a deal.

"Some of the identified risks create (…) others
negative risks are rising and interconnected and
can cause a much worse situation than expected ",
he warns.

INFLATION FORCES

The Commission forecasts a general government deficit
The euro area as a whole will reach 0.6% of GDP
this year, 0.8% in 2019 and 0.7% in 2020.

However, this year it is expected to reach 2.6% in France,
2.8% next year and 1.7% in 2020.

In the amendment to the amending law
On Wednesday, the Council of Ministers has a French government
maintained a forecast of 1.7% and a deficit
2.6% of gross domestic product this year.

In the financial account for 2019, the government
it expects a growth of 1.7% next year and a
an increase in the public deficit of 2,8% of GDP.

For Italy, the European Commission counts on the deficit
1.9% of GDP this year, which would reach 2.9% of GDP in 2009
2019 and 3.1% in 2020.

The forecast of inflation in the euro area has been revised
for next year and next year 1.8% per year
in two cases, compared with 1.5% and 1.6% in May.

Nevertheless, inflation would slow down in 2020
Commission forecasts that foresee higher prices
1.6% of this horizon, the figure is still much lower
the objective of the European Central Bank (ECB)
medium-term inflation is slightly less than 2.0%.

The ECB left its monetary policy unchanged a week
lastly, and reaffirmed that he intends to cease
an exceptional support program for loans and markets in Slovenia
despite the worsening of the growth potential and
searches related to the Italian budget policy.

(Marc Joanny for the French service, said Wilfrid
Exbrayat)


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