Eurozone growth forecast cut to 1.6pc for 2016
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