Euro­zone growth fore­cast cut to 1.6pc for 2016

Pakistan Observer - - ECONOMY WATCH -

BRUS­SELS— The EU cut Tues­day its euro­zone growth fore­casts for this year, warn­ing that global risks in­clud­ing the slow­down in China and the dan­ger of Bri­tain leav­ing the bloc were harm­ing eco­nomic re­cov­ery. Warn­ing of in­creased global risks for the 19- coun­try sin­gle cur­rency area as it con­tin­ues its slug­gish re­cov­ery, the Euro­pean Com­mis­sion trimmed its 2016 fore­cast to 1.6 per­cent from 1.7 per­cent.

The com­mis­sion also said, how­ever, that the euro­zone would likely grow by 1.8 per­cent next year, in­stead of the ear­lier fore­cast 1.7 per­cent. But the EU warned that “sub­stan­tial un­cer­tainty sur­rounds this fore­cast”. “Ex­ter­nal risks in­clude the pos­si­bil­ity that slower growth in emerg­ing mar­kets, par­tic­u­larly China, could trig­ger stronger spillovers or turn out worse than ex­pected,” the com­mis­sion said in a state­ment.

The com­mis­sion also pointed to do­mes­tic prob­lems in Europe that in­cluded the slow pace of re­forms “and the un­cer­tainty ahead of the UK’s EU ref­er­en­dum”. These dan­gers “could prove to be stronger than ex­pected”, the com­mis­sion warned.— AFP

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