Eurozone economy to grow fastest in 2017 in decade- European Union forecast

The Brandenburg Gate reflected by a puddle on Pariser Platz Square in Berlin Germany Tuesday Nov. 7 2017

The pace is the quickest in a decade, and the European Commission said it anticipates continued growth of 2.1 percent next year and almost 2 percent in 2019. Only the United Kingdom's growth outlook is nearly the same as Italy's, but Britain was excluded from the EU-28 table for the first time in view of Brexit. United Kingdom unemployment is projected to rise from 4.5% to 4.8% by 2019, while inflation eases from a peak of 2.7% to 2.1% in two years.

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. For the next two years, the Commission forecasts decrease in employment growth to 0.4% and 0.3% due to limited labour supply.

The commission said dark clouds that did exist included the outcome of Brexit talks beween European Union and Britain as well as geopolitical tensions between the USA and North Korea. The unemployment rate is projected to fall to 6.4% in 2017 and to gradually reach 5.7% in 2019.The Commission's assessment of the general government budget coincides with the fiscal policy objectives set out in the three-year budgetary projections 2018-2020, namely: a balanced budget in 2017 and 2018 and a surplus in 2019.

The optimism, the commission said, is fueled by increased private consumption, favorable lending conditions, improved economic growth around the world and falling unemployment in Europe.

"While market reactions to recent events in Catalonia have remained contained, the risk exists that future developments could have an impact on economic growth", the Commission noted in its reports, adding that the size of the impact "cannot be anticipated at this stage". Contrary to May's forecasts, the Commission now expects the French deficit to remain under 3 percent in 2018 - at 2.9 percent.

Malta's treal GDP growth could be pushed by the faster completion of infrastructure projects, as well as by the potential relocation of financial services operators to Malta due to Brexit.

The EU sharply raised its eurozone growth forecast for 2017 on Thursday, confident that the economic recovery was gathering pace despite the uncertainties of Brexit.

As a outcome of the fiscal easing, Romania's structural deficit is forecast to increase from an estimated 2.2% of GDP in 2016 to around 3.3% in 2017 and 4.3% in 2018.

The European Commission forecasts are slightly more pessimistic than other forecasts for the United Kingdom, but given that so far this year, the United Kingdom grew by 0.3 percent in both the first and second quarters, and by 0.4 percent in the third quarter, they don't seem unduly downbeat. The EC has forecast growth of 1.6 percent for Greece this year, with rates of 2.5 percent expected in both 2018 and 2019. For 2019, it expects growth of 1.9 percent.

Growth estimates are below those provided by the likes of the International Monetary Fund and the Bank of England.

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