ZCZC
BCN-11
EU-ECONOMY-GROWTH
EU sees growth steady at 1.2% but warns of coronavirus
BRUSSELS, Feb 13, 2020 (BSS/AFP) – The European Commission on Thursday maintained its eurozone growth forecast at 1.2 percent for 2020 and 2021, but warned Brexit and the new coronavirus outbreak could yet hit the economy.
For the broader EU, including countries outside the single currency, it forecast growth of 1.4 percent this year, down from the previous prediction of 1.5.
“The outbreak of the ‘2019-nCoV’ coronavirus, with its implications for public health, economic activity and trade, especially in China, is a new downside risk,” the Commission said.
“The baseline assumption is that the outbreak peaks in the first quarter, with relatively limited global spillovers. The longer it lasts, however, the higher the likelihood of knock-on effects.”
The commission said the departure of the EU’s second biggest economy was also a worry. The UK will leave the single market at the end of the year after an 11-month post-Brexit transition.
Negotiations are due to start soon on Britain’s future trading relationship, but for now the result is not known.
“Given that the future relations between the EU and the UK are not yet clear, projections for 2021 are based on a purely technical assumption of status quo in terms of their trading relations,” the commission said.
“This is for forecasting purposes only and reflects no anticipation or prediction with regard to the outcome of the negotiations between the EU and the UK on their future relationship.”
BSS/AFP/MMA/1740HRS