EU commission cuts growth outlook over trade pressures


FRANKFURT, Germany (AP) — The European Union’s executive arm has trimmed its forecasts for eurozone economic growth this year and next as uncertainty over trade conflicts and weakness in the auto industry hold back output.

The European Commission lowered its outlook for growth this year in the 19 countries that use the euro currency to 1.2% from 1.3% in its previous forecast in February. The estimate for 2020 was trimmed to 1.5% from 1.6%.

It said that domestic demand was keeping Europe’s economic upswing going in its seventh year, thanks to a strong job market, muted inflation and low borrowing costs.

Europe’s economy depends heavily on trade and has felt the effects from slowing global commerce and the trade dispute between the U.S. and China. Auto companies are struggling with tougher emissions regulations in the U.S. and China, and with trade disputes and uncertainty. Germany’s BMW, for example, on Tuesday reported an operating loss for its automotive business.

Pierre Moscovici, the European commissioner for economic and financial affairs, taxation and customs, said at a news conference in Brussels that the eurozone economy faces risks from “possible policy mistakes.”

Melania Trump Makes Rare Public Appearance - Newsweek Finds Issue with Coat She Wore

He said that there was “a worrying amount of uncertainty” about the outcome of trade talks. U.S. President Donald Trump is threatening to add more tariffs on Chinese goods as soon as this Friday barring a trade deal. Europe trades with both and would be sideswiped by a trade war.

A more detailed look at the forecasts shows that Germany, the eurozone’s largest economy, should be headed for a rebound next year, to 1.5% from 0.5% this year.

Italy is expected to be a weak spot, with growth next year of just 0.1%, and its budget deficit at 3.5% of annual GDP. That would breach the 3% limit set by fiscal rules aimed at supporting the shared euro currency — a development that could expose Italy and its populist government to pressure from the commission to reduce the deficit.

The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.

Truth and Accuracy

Submit a Correction →

We are committed to truth and accuracy in all of our journalism. Read our editorial standards.

The Associated Press is an independent, not-for-profit news cooperative headquartered in New York City. Their teams in over 100 countries tell the world’s stories, from breaking news to investigative reporting. They provide content and services to help engage audiences worldwide, working with companies of all types, from broadcasters to brands. Photo credit: @AP on Twitter
The Associated Press was the first private sector organization in the U.S. to operate on a national scale. Over the past 170 years, they have been first to inform the world of many of history's most important moments, from the assassination of Abraham Lincoln and the bombing of Pearl Harbor to the fall of the Shah of Iran and the death of Pope John Paul.

Today, they operate in 263 locations in more than 100 countries relaying breaking news, covering war and conflict and producing enterprise reports that tell the world's stories.
New York City