EU Commission forecasts stable growth for Slovenia through 2017

The European Commission has forecast stable growth for Slovenia through 2017 in its autumn economic outlook for the member states as exports and domestic consumption continue to grow.

The Commission notes that the Bulgarian economic growth in 2015 has been mainly driven by exports and the falling oil prices, but growth-supporting factors including the absorption of European Union funds are expected to lose their strength next year.

France and Spain – two of the eurozone’s four largest economies – are both set to miss deficit reduction goals set by the commission unless they take action.

“The risks weighing on growth have clearly increased”, EU Economy Commissioner Pierre Moscovici said, making reference to a slowdown in China and other emerging markets, a decline in global trade and persisting “geopolitical tensions”.

In 2016, the EC expects Bulgaria’s real GDP to increase by 1.5 %, which is lower than the economic growth of 2.1 % forecast by the government.

Paris is expected to post a deficit of 3.8% this year, 3.4% in 2016 and 3.3% the year after.

On current projections, Madrid is also expected to miss its target of bringing the deficit below 3% by 2016, despite previous warnings, with 4.7% projected for 2015 and 3.6 the year after.

Based on an assumption of an additional three million people entering the bloc by 2017 and a relatively high skill level of the migrants -equal to the current population- the EU’s growth will be boosted by just over quarter of a percentage point by 2017 compared with the baseline scenario, the commission said.

In the Spring edition of the report, the EC predicted Poland’s economy to grow by 3.3 percent this year, by 3,4 percent next year and to remain at 3.4 percent in 2017.

Downside risks include what the Commission diplomatically referred to as “the recent turmoil in main trading partners” as well as sanctions against Russian Federation, which it said could weigh more on activity than forecast.

– Inflation outlook for 2016 lowered to +1.0%, from a prior+1.5%.

The Euro-Zone Gross Domestic Product forecast for 2015 was upgraded to +1.6% from the prior estimate of +1.5%, supported by improving labor-market conditions and higher nominal income.