European Union registers 'highest economic growth rate in 10 years'

European Union registers 'highest economic growth rate in 10 years'

European Union registers 'highest economic growth rate in 10 years'

The 19-country eurozone will grow by 2.2 percent in 2017, its fastest pace in a decade, the European Commission said in its autumn economic forecasts.

In its half-yearly health check, the commission sharply cut its forecast for United Kingdom growth this year and said it was likely to continue struggling in 2018 and 2019 even on the assumption that trade would not be disrupted by its departure from the EU. For 2019, the EC predicts 3.4 percent GDP growth.

The threats were evident in the bloc's forecasts for 2018 and 2019, when economic growth is expected to slow down. The bloc also cut its United Kingdom 2017 economic growth forecast to 1.5% from 1.8% while keeping it steady at 1.3% for next year.

The Commission estimates that the budget deficit this year and next year will be 0.9 percent of GDP, while in 2019 it will be 0.7 percent of GDP.

The agency noted that the European Union economy continues to glide forward on the wings of favorable financing conditions made possible by accommodative monetary policies, with additional thrust from improving labor market conditions and stronger global growth and trade.

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Come 2018, there is expected to be a slow-down to 4.9% in real GDP growth, with private consumption expected to become the principle factor behind the growth, based on an increasing population and higher disposable income.

In 2017, the government balance is projected to remain in surplus, at 0.9% of GDP. The Commissioner added that the recovery in the eurozone is low by historical standards and was "atypical given its dependence on policy support, the continuing presence of fiscal and financial fragilities stemming from the crisis and the relatively subdued domestic demand compared to past recoveries". Investment is also picking up amid favorable financing conditions and considerably brightened economic sentiment as uncertainty has faded, suggesting that the European citizens move forward, leaving the economic crisis in the past, as the economies of all EU-member states are expanding and their labour markets improving, but wages are rising only slowly. The labour market is recovering fast and unemployment is expected to drop further, although average wages may increase only gradually. The European Commission said in its autumn economic forecasts on Thursday that it sees Italy's debt falling only marginally. Public finances remain on track to meet the primary surplus targets agreed under the ESM programme.

The unemployment rate in Croatia will this year be 11.1 percent, falling to 9.2 in 2018, and 7.5 percent in 2019, which should be somewhere near European Union average.

Despite the pick up in growth, Europe's unemployment rate is expected to be 8.5% next year - double the rate in the UK.

France's debt was still high at 96.9 percent and would remain at that level through 2019.

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