EU Commission trims growth forecast amid concerns about risks to Irish economy

Commission cuts euro zone growth forecasts for 2019

EU Commission trims growth forecast amid concerns about risks to Irish economy

"Croatia's economy is expected to continue growing at a moderate pace over the forecast horizon". The estimate for 2020 was trimmed to 1.5% from 1.6%.

The EU Commission is pivoted so that on the downward revision of the economic forecast of the Federal government, most recently expected only with an increase in GDP of 0.5 percent.

In 2020, GDP growth is expected to slow further to 2.8%. At the same time the share of public debt in GDP could be reduced from last year's 74.6% to 70.9% in 2019 and to 67.6% in 2020. Europe's biggest economy - formerly the powerhouse of the single currency area - is now forecast to grow by just 0.5 per cent in 2019, compared to the 1.1 per cent growth the EC foresaw in February.

"The European economy is proving resilient in the face of a less favourable external environment", said the EU Commissioner Valdis Dombrovskis. The unemployment rate in the euro area is forecast to fall to 7.7 percent in 2019 and to 7.3 percent in 2020, lower than it was before the crisis began in 2007.

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Ireland has been the best performing economy among European Union states for four years, but buoyant growth rates are set to fall sharply because of uncertainty created by Brexit and a possible trade war between the USA and China. Regarding Estonia, the European Commission said that strong, broad-based growth is expected to continue in 2019. "This, together with rising wages, muted inflation, favorable financing conditions and supportive fiscal measures in some member states, is expected to buoy domestic demand", it said.

The EU's aggregate government deficit is expected to increase from 0.6 percent of GDP in 2018 to 1 percent in both 2019 and 2020.

The debt of the most highly indebted Greece, which last year emerged from its third euro zone bailout, is to fall to 174.9% of GDP this year from 181.1% last year and to 168.9% in 2020. "In Europe, we should stay alert to a possible no-deal Brexit, political uncertainty and a possible return of the sovereign-bank loop".

"Uncertainty related to a possible resolution of the US-China trade tensions remain elevated while the risk of further protectionist moves in US trade policy persists", said the report.

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