2018 is set to finish strong financially for the bloc, but 2019 will see a predicted slowdown

Growth within the EU for the remainder of 2018 is set to be ‘strong’ according to the European Commission.

In contrast, 2019, will see more exposure to ‘external risk factors’- most notably Brexit.

According to the Commission’s forecasts, growth rates for the EU and the euro area beat expectations in 2017 to reach a 10-year high at 2.4%. Growth was supported by high consumer and business confidence, stronger global growth, low financing costs, healthier private sector balance sheets and brighter labour market conditions.

According to the report:

”While short-term indicators suggest a cooling of activity in early 2018, this looks likely to be partly temporary. The pace of growth is expected to remain robust on the back of sustained consumption and strong exports and investment. Both the EU and the euro area are forecast to grow by 2.3% this year. Growth in both areas is projected to ease to 2.0% in 2019 as bottlenecks become more apparent in some countries and sectors, monetary policy is adjusted to circumstances and global trade growth calms somewhat.

”The aggregate euro area government budget deficit and public debt both fell as percentages of GDP in 2017, helped by strong economic growth and low interest rates. With Member States’ budgets benefitting from the effects of improving labour market conditions, including through lower social benefit payments, 2018 is set to be the first year since the start of the Economic and Monetary Union in which all governments manage budget deficits of less than 3% of GDP, as referred to in the Treaty. The euro area’s debt-to-GDP ratio is forecast to fall to 84.1% in 2019, with declines projected for almost all Member States.”