BUSINESS OF ECONOMIC GROWTH

EU SLOWDOWN IS PREDICTED

THE EUROPEAN Commission has sharply cut its forecasts for eurozone economic growth this year and next, because it expects the bloc’s largest countries to be held back by global trade tensions and an array of domestic challenges.

In its quarterly economic forecasts yesterday, the EU executive also revised down its estimates for the inflation in the 19-country currency bloc next year, which now is expected to be lower than forecast by the European Central Bank – probably complicating the bank’s plans for an interest rate hike this year. The commission said eurozone growth would slow to 1.3 percent this year from 1.9 percent in 2018, before rebounding in 2020 to 1.6 percent. The new estimates are far less optimistic than those released in November, when Brussels expected the eurozone to grow 1.9 percent this year and 1.7 percent in 2020. All countries in the 28-state EU are poised to continue growing, with the bloc expected to post its seventh consecutive year of expansion. | Reuters