Summer 2019 Economic Forecast: Growth clouded by external factors

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The European economy is set for its seventh consecutive year of growth in 2019, with all Member States’ economies due to expand. The near-term outlook for the European economy, however, is clouded by external factors including global trade tensions and significant policy uncertainty. As a result, the forecast for euro area GDP growth in 2019 remains unchanged at 1.2%, while the forecast for 2020 has been lowered slightly to 1.4% following the more moderate pace expected in the rest of this year (spring forecast: 1.5%). The GDP forecast for the EU remains unchanged at 1.4% in 2019 and 1.6% in 2020. Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: “All EU economies are still set to grow this year and next, even if the robust growth in Central and Eastern Europe contrasts with the slowdown in Germany and Italy. The resilience of our economies is being tested by persisting manufacturing weakness stemming from trade tensions and policy uncertainty. On the domestic side, a “no deal” Brexit remains a major source of risk.” Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “The European economy continues to expand against a difficult global backdrop. All EU countries are set to grow again in both 2019 and 2020, with the strong labour market supporting demand. Given the numerous risks to the outlook, we must intensify efforts to further strengthen the resilience of our economies and of the euro area as a whole.” 

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