According to the “autumn forecasts” just unveiled by the European Commission, for the seventh consecutive year, Europe seems to be taking a long-term lead in growth; and this for the next two years, despite increasingly strong economic shocks.
By Luxus Plus
Growth, therefore, but weak and without any impact, according to the European Commissioner for Economic and Financial Affairs, Pierre Moscovici: “This is perhaps the most important feature of our forecasts for this quarter: this lack of rebound marks a change from our previous forecasts. This reflects the shocks experienced by the euro area and we know that it will take time for the impact of these shocks to fade and for us to move into a new, more moderate growth regime“.
According to the European Commission, the euro zone’s gross domestic product is expected to grow by 1.1% in 2019. The International Monetary Fund is a little more optimistic, and expects growth of 1.2% this year.
This is a considerable decrease compared to last year’s 1.9%.
Germany, the weak link in growth
According to Poul Thomsen, Director of the European Department of the IMF, “the German economy is above its long-term potential. In general, there is a weakening of the European economy but it remains relatively strong. And we see a possibility of recovery in Germany. »
Despite a possible recovery, the IMF has lowered Germany’s growth forecasts with only 0.5% GDP growth in 2019.
For the European Commission, the figure would be even slightly lower, 0.4%.
The threat of a Brexit without agreement
But the real adjustment variable of the European economy is above all Brexit, an uncertainty that weighs on the United Kingdom’s growth forecasts.
The commission forecasts UK growth of 1.3% this year fr-libido.com.
According to the IMF, growth is expected to reach 1.2% in 2019 and 1.4% in 2020. All this of course, in case of agreement.
In the event of a no deal, the pound exchange rate would fall, inflation would rise and GDP growth would slow by the end of 2021.
Economic damage equivalent to the loss of at least 2 to 3 years of normal growth.
The Asian slowdown
The Asian slowdown is also not unrelated to the reservations expressed by the Commission.
China experienced a more significant than expected slowdown in industrial production in October.
According to BNP Paribas, Chinese growth is expected to continue to slow in the fourth quarter for reasons beyond the trade dispute with the United States alone.
The Japanese economy grew in the third quarter at its slowest pace in a year.
Last Thursday, in Paris, the CAC 40 fell by 0.1% to 5.901.08 points.
The British Footsie gave up 0.8% and the German Dax gave up 0.38%.
The EuroStoxx 50 index dropped by 0.29%, the FTSEurofirst 300 by 0.42% and the Stoxx 600 by 0.36%.
Today’s positive macroeconomic surprise came from Germany, which recorded an unexpected 0.1% growth in its gross domestic product in the third quarter, thus escaping a technical recession.
