After a year in 2018 already complicated, 2019 should be marked by an economic slowdown on a global scale. Several factors have led the european Commission to revise Thursday to lower its growth forecast of the GDP of France in 2018, 2019 and 2020. This year, growth is projected at 1.3% against 1.6% expected last autumn, a correction that reflects that of the euro area as a whole. The decline is expected to continue into 2020 : the Commission forecasts 1.5% growth in only less than 1.6% expected up here. Similarly, Brussels has lowered slightly its growth forecast for 2018 to 1.5% (from 1.7% in autumn).
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The economy hexagonal should therefore continue to slow down this year. In addition to the factors that can affect the entire euro area, the Commission cites the movement of the “yellow Vests” as having contributed to the decline in growth at the end of 2018. “The budget measures, including those adopted at the end of 2018, even as a lower inflation, should support the purchasing power”, however, considers the eu executive. But the weakness in household confidence could limit this effect, unless the impact of the measures is materialized more quickly than expected, ” added the Commission.
the Commission’s forecasts go in the same direction as those of the Bank of France, IMF, as of the Insee : in its latest forecasts, the institution led by Christine Lagarde has warned that the context would be marked by “a more pronounced decline of the global growth”, lowering its growth forecast for france to 1.5% this year.
overall Slowdown
Commenting on these results, the commissioner for economic and financial affairs, Pierre Moscovici, explained the slowdown by the conjunction of the “uncertainties surrounding the world trade”, and that “national factors” in some countries of the Union. For his part, the vice-president for the euro and social dialogue, Valdis Dombrovskis, has been listed as the main causes of the “economic slowdown” in emerging countries, the Brexit, the increase in sovereign debt as well as the “trade tensions”.
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at the european level, the Commission has sharply lowered on Thursday its growth forecasts for the euro area in 2019, relying now on 1.3% from 1.9% previously. For the whole of the Eu-27, its winter forecast give a growth rate of 1.5% of GDP this year, compared with 2.0% in the autumn and 1.8% from 1.9% in 2020. France is not the only country hit by an economic slowdown : the european executive expects now a growth of 1.1% in Germany (from 1.8% in its autumn forecasts) and 0.2% for Italy (compared with 1.2% before). The country led by Angela Merkel is suffering in particular the slowdown of its production car”, while the Boot is going to pay the price of “uncertainty” caused by the “fiscal policy” of his government.
in addition, the commission has revised downward its inflation forecasts for the euro zone from 1.8% to 1.4% for this year and from 1.6% to 1.5% for 2020, compared to 1.7% (revised from 1.8%) in 2018.
