The EU on Thursday lowered its growth forecasts for the eurozone, saying that global trade tensions are set to weigh down the region and limit economic expansion.
The warning from the EU executive arm, the European Commission, comes at a time when the European Central Bank (ECB) has started a new round of stimulus to support fragile growth.
"The fact that growth is no longer expected to come back meaningfully over the next two years is a major shift compared to previous forecasts and is based on the assumption that many features of the global decline will be sustained," he said. The European Commission Thursday in its autumn financial forecasts.
"The most important thing is that the surge in trade tensions and record-high trade policy uncertainty is likely to have caused lasting damage to world trade," the commission added.
Trade uncertainty includes: The future relationship between the UK and the EU, because both need to establish new trade rules after Brexit; new consumer preferences in the automotive industry and volatility in the US and China.
As a result, the Commission lowered its economic forecasts for the eurozone in 201
"We are entering a new period. For seven years, we have had consecutive growth and the last three years , to 2019, a very significant rate. This is obviously no longer the case, "Pierre Moscovici, the EU's Finance Commissioner told reporters on Thursday.
"We are still growing, so we are not preparing for any kind of recession scenario at all," he said.
Moscovici, however, said: "We do not now expect a rebound in 2020 and 2021, which was the case before. So we are for a period of a few years and we have to make sure that this plateau is not a long time since we On the other hand, there are disadvantages that can materialize. "
Moody's credit rating agency said Tuesday that income inequality has worsened in Europe over the last 30 years. "Evidence has shown that income inequalities can weaken potential growth because of its effects on health and education outcomes. Increasing or increased income inequality can also affect political preferences and may contribute to reduced support for free trade," Moody's said in its report. [19659011] Italy – the slowest growing economy
Italy is growing 0.1% this year and 0.4% in 2010 – the lowest rate in the entire eurozone and the EU. In April last year, the European Commission estimated a 0.7% growth rate for Italy in 2020.
"Italy's economy was halted in early 2018 and still shows no signs of meaningful improvement," the European Commission said on Thursday.
Italy's public debt stack – the second highest in Europe, will eventually grow from 136.2% in 2019 to 137.4% in 2021. Unemployment is set at 10% between 2019 and 2021.
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