Eurozone growing at quickest pace in 10 years, European Union forecast says

The European Commission (EC) has raised its projections for GDP growth in Hungary to 3.7% for this year and 3.6% in 2018 in a forecast released Thursday, Hungarian news agency MTI reported.

Euro zone economic growth for 2017 is forecast to come in at 2.2%, the EC said, raised its estimate significantly from the previous 1.7%.

The EU economy as a whole was forecast to beat expectations with "robust" growth of 2.3% this year, up from 1.9% in the spring forecast, followed by 2.1% in 2018 and 1.9% in 2019. The EC has forecast growth of 1.6 percent for Greece this year, with rates of 2.5 percent expected in both 2018 and 2019.

Outside Europe, global tensions as well as adjustments in the Chinese economy or possible protectionist measures by the United States mean that the Commission can not predict whether EU's economic situation will "turn out better or worse than forecast".

In 2019, GDP growth is projected to slow down to 4.1 percent, below potential output. Investment is predicted to increase slightly, mostly due to the construction sector.

In its report, the European Commission points out that growth in the first half of this year remained "surprisingly strong", and that the impact of the restructuring process in Agrokor, the largest private employer, was smaller than expected.

"Growth in private consumption will be modest and uncertainty will continue to weigh on business investment decisions", Mr. Moscovici said.

The outlook was positive for Spain despite the crisis over Catalonia, with its growth foreacast upgraded to a robust 3.1 percent for this year, leading the eurozone's major economies. He also said the eurozone needs to become "more resilient" to future shocks and turn itself into a "true motor of shared prosperity".

The main factor behind this year's growth is set to be external demand, with domestic demand coming in second because of a significant contraction in investment. Over the next two years, unemployment is set to decrease further to 8.5% in 2018 and 7.9% in 2019. Malta is the best performer, with growth of 5.6% in 2017, 4.9% in 2018 and 4.1% in 2019.

However, as the European Union eyes economic growth for all its members next year for the first time since 2007, its outlook for the souring.

The Commission noted the the prospect of Brexit "is already having an impact on economic activity" and insisted that its forecasts for 2019 where based "on a purely technical assumption of status quo in terms of trading relations between the EU-27 and the United Kingdom". Romania's 2017 budget is built on projections for 6.1% economic growth and deficit equivalent to 2.96% of GDP. Monthly government statistics to date suggest that the 2017 general government primary balance target (1.75 pct of GDP in terms of the ESM programme definition) will be met, with the balance of risks tilted to the upside.

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