European Commission Raises Growth Forecasts for Region

Euro zone economic growth should grow a bit faster this year than previously believed and the unemployment rate could be the lowest in a decade, the European Commission said on Thursday.

It also predicted low inflation, a challenge for the European Central Bank which is trying to boost it.

The 19-country euro zone is expected to expand by 1.7 percent this year and 1.8 percent in 2018, the EU executive said, slightly raising its previous estimate for euro zone growth of 1.6 percent this year, while leaving unchanged the 2018 forecast.

The projected growth for 2017, however, remains lower than 2016 when it was 1.8 percent, and further below the 2.0 percent post-crisis high reached in 2015.

The Commission’s forecasts, published three times a year, predict all euro zone countries will grow this year and next, with Germany, the bloc’s largest economy, accelerating to 1.9 percent in 2018, and Spain and Portugal expanding much more than previously expected.

“Europe is entering its fifth consecutive year of growth,” EU Economics Commissioner Pierre Moscovici said.

“It is good news too that the high uncertainty that has characterized the past 12 months may be starting to ease,” he said, noting that far-right nationalism “was defeated,” a reference to far-right candidate Marine Le Pen’s loss at last week’s French presidential elections.

via Reuters

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