Economy: Commission’s forecast. Moscovici, “more subdued growth expected in coming years”

“The European economy is now in its seventh consecutive year of growth and is forecast to continue expanding in 2020 and 2021. Labour markets remain strong and unemployment continues to fall. However, the external environment has become much less supportive and uncertainty is running high. This is particularly affecting the manufacturing sector, which is also experiencing structural shifts”. The EU Commission has published its Autumn Economic Forecast today: it points to positive elements but also to “uncertainty” (a recurring word). Indeed, Commissioner Pierre Moscovici explained, there are “risks” that could “lead to lower growth” in the coming years. The European economy “looks to be heading towards a protracted period of more subdued growth and muted inflation”. Euro area gross domestic product (GDP) is forecast to expand by 1.1% in 2019 and by 1.2% in 2020 and 2021. Compared to the Summer 2019 Economic Forecast (published in July), the growth forecast has been downgraded by 0.1 percentage point in 2019 (from 1.2%) and 0.2 percentage points in 2020 (from 1.4%). For the EU as a whole, GDP is forecast to rise by 1.4% in 2019, 2020 and 2021. The forecast for 2020 was also revised down compared to the summer (from 1.6%).