The European Commission released on 7 November its “Autumn 2019 Economic Forecast“, according to which, the European economy is in its seventh consecutive year of growth and is forecast to continue expanding in the next two years.
Although labour markets remain strong, there is a risk of high uncertainty, such as trade conflicts, rising geopolitical tensions, persistent weakness in the manufacturing sector and Brexit. The euro area gross GDP is forecast to expand by 1.1% this year and by 1.2% in the following two years.
The Union’s Vice-President for the Euro and Social Dialogue also in charge of Financial Stability, Valdis Dombrovskis, urged all EU countries with high levels of public debt to “pursue prudent fiscal policies and put their debt levels on a downward path”.
According to the report, trade tensions between the US and China have dampened investment, manufacturing and international trade. Employment, however, is at a record high, inflation in the euro area has slowed due to the fall in energy prices, and the public debt is forecast to continue declining for the fifth year in a row.
The forecast is based on a set of technical assumptions concerning exchange rates, interest rates and commodity prices with a cut-off date of 21 October.