Published: Thu, November 09, 2017
Finance | By Loren Pratt

EC raises Croatia's GDP growth fcast as economy proves resilient to Agrokor

EC raises Croatia's GDP growth fcast as economy proves resilient to Agrokor

In a regular forecast for all European Union economies, the Commission said that Greece would have a primary surplus - the budget balance before debt servicing costs - of 2.0 percent this year.

Brexit in March 2019 is forecast to see European Union growth slow to 1.9%. The Croatian government intervened in the company and installed a state-appointed manager who is now transforming the company.

This would be the single currency area's fastest rate of growth since 2007. In addition, according to EC forecasts, tourist arrivals and the number of overnight stays have increased by double-digit rates.

In the report, 'Brexit - where are we now?', Capital Economics said: "The City of London will likely remain a hub of prosperity after March 2019".

Come 2018, there is expected to be a slow-down to 4.9% in real GDP growth, with private consumption expected to become the principle factor behind the growth, based on an increasing population and higher disposable income.

The surplus is expected to decline to 0.5% in 2018, once the 2018 budget measures are introduced, but should remain stable at the same figure in 2019, under a no-policy-change assumption.

In this scenario the report predicts there will not be a major slowdown or recession but expects "some economic dislocation" in 2019 and that growth would dip under 1 per cent.

The EU predicted these reforms would benefit the economy, with French growth to hit 1.6 percent this year, up from the earlier 1.4 percent.

"This is for forecasting purposes only and has no bearing on the talks underway in the context of the Article 50 process", it said.

"Net exports are forecast to make a smaller contribution to growth, as the growth in export markets will be partially offset by the waning boost from sterling's past depreciation". "The European economy has performed significantly better than expected this year, propelled by resilient private consumption, stronger growth around the world, and falling unemployment". It is however expected to grow to 1.8% in 2019, with higher prices in the services projected to be behind this.

However, the risk of the United Kingdom losing its position as the main euro-clearing centre, worth some £1.1bn to the economy, could signal a setback which sparks firms to move operations to Europe.

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