TOP NEWS: Eurozone Expected To Grow At Fastest In Decade As UK Slows
Real gross domestic product (GDP) growth in Malta is forecast to reach 5.6 percent for all of 2017, according to the European Commission's autumn forecast published on Thursday.
As a result, GDP growth in France is expected to reach 1.6 percent in 2017, 1.7 percent in 2018, and to slightly decelerate to 1.6 percent in 2019.
The European Commission assesses that this year the Croatian economy will grow by 3.2 percent, 2.8 percent next year, and 2.7 percent in 2019.
Only Italy's economy was in a similarly sluggish state to Britain's, with a forecast of 1.5% GDP growth this year, 1.3% in 2018 and 1% in 2019.
By contrast to the slowing United Kingdom economy, the rest of Europe will continue to grow robustly, carrying on the strong levels of economic expansion seen over the past year or so.
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"The European Commission's latest set of forecasts does not make for particularly pleasant reading for UK policymakers, showing as it does a continued slowdown in UK GDP growth", said Commerzbank's top UK economist Peter Dixon.
In its report, the European Commission points out that growth in the first half of this year remained "surprisingly strong", and that the impact of the restructuring process in Agrokor, the largest private employer, was smaller than expected. The pick-up in growth has been mostly driven by private consumption, spurred by tax cuts, significant hikes in both public and private wages, and low rates of inflation. He also said the eurozone needs to become "more resilient" to future shocks and turn itself into a "true motor of shared prosperity".
In the coming months and years, the Commission noted, "business investment is projected to remain subdued following a period of heightened uncertainty, while net export growth is forecast to moderate marginally, in line with export markets". Unemployment in the euro area is expected to average 9.1% this year, its lowest level since 2009, as the total number of people employed climbs to a record high. GDP growth and inflation are therefore still dependent on policy support. Spain's economy is predicted to expand by an impressive 3.1 percent this year, falling back to 2.5 percent and 2.1 percent over the next two years - even without any impact from Catalonia's independence movement, which has prompted Madrid to impose direct rule on the region and arrest many of its leaders. United Kingdom unemployment is projected to rise from 4.5% to 4.8% by 2019, while inflation eases from a peak of 2.7% to 2.1% in two years. Moreover, there is a risk of a possible under-execution of the public investment budget in 2018, which would hinder overall investment growth as well.
Given the ongoing negotiation on the terms of the United Kingdom withdrawal from the European Union, our projections for 2019 are based on a purely technical assumption of status quo in terms of trading relations between the EU27 and the UK.
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