The winter economic forecast of the European Commission

The European Commission has made public its winter economic forecast – one of the important instruments regarding the development of EU economies.

Corina Cristea, 14.02.2017, 14:15

Awaited with interest, the winter forecast of the European Commission has brought good news for the first time in the last nine years, saying that all EU economies will grow during the period under scrutiny, that is 2016-2018. According to estimates, even the European countries deeply hit by economic downturn will register economic growth, while unemployment will go down to the lowest rates after the 2008 economic crisis.

The forecast says that in the Eurozone the GDP has been growing for 15 quarters in a row. Employment is on the rise at an encouraging pace and unemployment keeps plummeting. Private consumption continues to be the engine of recovery and investments keep growing, at a modest pace though. Those prospects are however overshadowed by an uncommonly greater uncertainty triggered by the new US administration, the future elections in certain European countries, as well as by Brexit. According to the European Commissions forecast, the economic growth rate in Romania is one of the highest in the European Union and it is estimated to stay that way until 2018, being backed by fiscal relaxation and pay rises. However, figures are fairly lower than the ones considered in drafting the budget and experts say that there is the danger of the budget deficit target being exceeded. Economic analyst Aurelian Dochia:

“For a few months now, the European economy has been showing signs of recovery. It is obvious that at the level of the European economy, Romania ranks among the countries with the highest economic growth rate. The European Commission predicts that in 2017, the growth rate of Romanias GDP will be 4.4%; although it is a very high rate in the European Union, it is lower than the governments forecast and the figures underlying the budget, which has recently been debated by Parliament. That obviously questions the way in which 2017 is going to end. If the economic growth rate is going to be below the 5.2% rate forecast by the government, it means that the budget revenues will be much lower than expected.

Senate Speaker Calin Popescu-Tariceanu said on Monday after the winter economic forecast of the European Commission had been made public that Romanias budget deficit in 2017 would be higher than in 2016 but that it would not exceed 3%. (Translated by A.M. Palcu)