European Commission Downgraded Eurozone Economic Forecasts
The European Commission reduced its economic forecasts for the Eurozone, amid growing trade tensions with the United States and rising oil prices which are pushing the Eurozone inflation higher.
According to updated forecasts, the Eurozone GDP will grow by 2.1% this year, lower than the 2.3% growth forecast in the previous estimates released in May. It is also predicted, that the Eurozone economic growth will slow to 2.0% next year, unchanged from the previous forecast. Eurozone inflation is expected increase to 1.7% in 2018 and 2019, from the previously estimated 1.5% in 2018 and 1.6% in 2019.
Germany and France (the two largest economies of the Eurozone) are expected to lose steam this year and next. Germany's GDP growth will slow to 1.9% in 2018 and 2019, from the previously estimated 2.3% in 2018 and 2.1% in 2019. France's economy is forecast to grow 1.7% in 2018.
The EU Commission also cut the UK GDP growth forecast to 1.3% this year, from 1.5%. Britain's inflation is also forecast to rise to 2.6% this year, from a previous estimate of 2.5%.