In their latest economic outlook review, the EU Commission downwardly revised Eurozone 2016 GDP forecast to +1.6% vs +1.7% prev. It now sees euro zone gross domestic product (GDP) in 2017 at 1.8 percent from a previous forecast of 1.9 percent. For the European Union as a whole, the GDP was forecast to grow at 1.9 percent in 2016 and rise to 2 percent in 2017.
EU Commissioner Pierre Moscovici told a press conference that there would be “stable growth” this year but that the recovery could be faster. He added that financial market volatility at the start of the year had not helped the region's economy and that an economic slowdown in China still posed a risk.
The Commission again slashed its inflation forecast and called for the euro area’s largest economies to reduce debt and modernize labor markets. It said euro zone inflation will average 0.2 percent this year and 1.4 percent in 2017, below the European Central Bank’s target.
“Decisive policy action to reform and modernize our economies is the only way to ensure strong and sustainable growth, more jobs and good social conditions,” European Commission Vice President Valdis Dombrovskis said in a statement. “High levels of public and private debt, vulnerabilities in the financial sector or declining competitiveness remain the biggest problems.” he added.
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