5th November 2015
The economic recovery in the eurozone and the European Union should continue “at a modest pace next year” despite more challenging conditions in the global economy according to the EU.
Against a backdrop of declining oil prices, accommodative monetary policy and a relatively weak external value of the euro, the economic recovery this year has been resilient and widespread across member states but it has, however, remained slow, the EU said in a statement.
Overall, the EU anticipates that the eurozone GDP will grow by 1.6% in 2015, rising to 1.8% in 2016 and 1.9% in 2017.
For the EU as a whole, real GDP is expected to rise from 1.9% this year to 2.0% in 2016 and 2.1% in 2017
The organisation believes the impact of positive factors is fading, while new challenges are appearing, such as the slowdown in emerging market economies and global trade, and persisting geopolitical tensions.
It added that backed by other factors, such as better employment performance supporting real disposable income, easier credit conditions, progress in financial deleveraging and higher investment, the pace of growth is expected to resist the challenges in 2016 and 2017.
The EU believes in some countries, the positive impact of structural reforms will also contribute to supporting growth further.
European commissioner Pierre Moscovici said: “The European economy remains on recovery course. Looking to 2016, we see growth rising and unemployment and fiscal deficits falling. Yet the improvements are still unevenly spread: particularly in the euro area, convergence is not happening fast enough.
“Major challenges remain: insufficient investment, economic structures that hold back jobs and growth, and persistently high levels of private and public debt. These require bold and determined policy responses in 2016, especially in the face of an uncertain global outlook.”