Thursday 13 February 2020 7:19 pm

EU leaves eurozone growth forecasts unchanged

The European Commission left its economic forecast unchanged for this year and 2021, as it warned that several eurozone member states may see more sluggish growth. 

The commission said gross domestic product (GDP) growth for the 19 eurozone countries would remain at 1.2 this year, continuing into 2021.

Read more: Coronavirus dents Eurozone investor confidence

The EU executive said that while the first phase of a trade deal between the United States and China helped reduce risks to some extent, the spread of the Wuhan coronavirus was now the main threat to the growth forecast.

Germany’s economy is particularly at risk from the coronavirus outbreak, it said. 

GDP growth in Germany slumped to 0.6 per cent in 2019 and is expected to rebound to 1.1 per cent this year.  However, the commission warned that the country was “particularly exposed” to the effect of the coronavirus outbreak. 

Meanwhile, Belgium’s economic  growth is expected to ease to 1.2 per cent this year, from 1.4 per cent in 2019, and fall to one per cent in 2021.

The commission also forecast that France’s economic growth will slump to 1.1 per cent this year, from 1.2 per cent in 2019. 

Meanwhile, Italy’s growth is forecast to pick up slightly to 0.3 per cent. 

Read more: French and Italian economies shrink as Eurozone slows

The commission said inflation across the euro area is expected to accelerate slightly, because of the likelihood of higher oil prices and the effect of higher wages passing through to core prices. 

Consumer price growth forecasts for the eurozone were raised to 1.3 per cent this year and 1.4 per cent in 2021, from the 1.2 per cent and 1.3 per cent respectively predicted last November.