European Commission upgrades GDP growth forecast for Poland


As a result United Kingdom economic growth is seen slowing to 1.3% in 2018 before slumping to 1.1% in the year of Brexit.

However, as the European Union eyes economic growth for all its members next year for the first time since 2007, its outlook for the souring.

"We have entered a new phase with a concrete impact on economic indicators", he said, adding that the effects were now "being felt by citizens".

EU commissioner Pierre Moscovici said: "After five years of moderate recovery, European growth has now accelerated". The European Central Bank has kept its monetary policy very accommodative while some other central banks around the world have started raising interest rates. The economies of all Member States are expanding and their labour markets improving, but wages are rising only slowly.

The risks that economic developments could turn out better or worse than forecast are broadly balanced. "This is substantially higher than expected in spring (1.7%)", the Commission noted.

The EC forecast did not mention the Catalonian crisis and actually raised growth forecasts for Spain up to a healthy 3.1 percent for 2017.

UK GDP growth for 2017 was downgraded to 1.5% - from 1.8% in the previous forecast in the spring - with the prediction for 2018 unchanged at 1.3% and a gloomier 1.1% for 2019, when Britain is due formally to leave the EU.

Political anxiety has also decreased across Europe - as Germany, France and the Netherlands re-elected centrist, pro-EU governments this year. Contrary to May's forecasts, the Commission now expects the French deficit to remain under 3 percent in 2018 - at 2.9 percent.

That compares with 0.5% this year, the Commission said.

The International Monetary Fund is expecting United Kingdom growth of 1.7 per cent this year, while the Organisation for Economic Cooperation and Development is forecasting growth of 1.6 per cent.

"Growth in private consumption will be modest and uncertainty will continue to weigh on business investment decisions", Mr. Moscovici said.

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. Greece is set to exit its bailout era, which started in 2010, next summer.

Macron is now pushing through significant labor reforms in France and hopes around those reforms, combined with his repeated calls for enhanced European economic cooperation and consolidation, have helped push growth expectations for France for 2017 up to 1.6 percent from the earlier 1.4 percent.

Consumer price inflation is expected to reach 1.2 pct in 2017, mainly as a result of the rebound in energy prices, rises in indirect taxation and with average wages recovering moderately.

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