EU Commission sees Greek primary surplus at 3.9 percent/GDP in 2018

The Brandenburg Gate reflected by a puddle on Pariser Platz Square in Berlin Germany Tuesday Nov. 7 2017

The 19-member eurozone is expected to grow at its fastest pace in a decade this year, with gross domestic product growth beating forecasts and projected to reach 2.2%, well outpacing the United Kingdom, according to a European Commission report released on Thursday.

According to the European Union executive's Winter Economic Forecasts, the eurozone economy will grow by 2.2 percent this year, 2.1 percent next year and at 1.9 percent in 2019.

Regarding potential risks for Bulgaria's economy, the EC said that "a slower utilisation of European Union funds could moderate the contribution of investment to growth", while increased tax revenues could create pressure for "additional wage increases, as well as for public investment fully outside the European Union funds programmes". Autumn forecast of 2017 marks 18 straight quarters of growth and survey evidence points to continued solid expansion of the eurozone economy.

Malta's treal GDP growth could be pushed by the faster completion of infrastructure projects, as well as by the potential relocation of financial services operators to Malta due to Brexit. For 2018, the forecast was increased by 0.6 percentage points to 3.8 percent.

The EC said growth this year is supported by private consumption and rebounding investment.

Brussels believes that the United Kingdom economy will slow further to 1.3% in 2018 and 1.1% in 2019 - with growth of just 0.3% in every quarter for the next two years. The unemployment rate is projected to fall to 6.4% in 2017 and to gradually reach 5.7% in 2019.The Commission's assessment of the general government budget coincides with the fiscal policy objectives set out in the three-year budgetary projections 2018-2020, namely: a balanced budget in 2017 and 2018 and a surplus in 2019. Our policies need to remain firmly focused on making growth sustainable and inclusive.

That compares with 0.5% this year, the Commission said. "The European economy has performed significantly better than expected this year, propelled by resilient private consumption, stronger growth around the world, and falling unemployment".

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: "After five years of moderate recovery, European growth has now accelerated".

He also noted that the current growth cycle is characterised by "less output" than previous cycles, and that "a sluggish wage growth partly reflects low productivity growth and persistent slack in [the] labour market".

"Based on a purely technical assumption of status quo in terms of trading relations between the EU27 and the United Kingdom, growth is still expected to remain subdued over the forecast horizon". "While the effects of recent tax reforms pale, household consumption is expected to remain strong thanks to job growth, wage increases and favourable credit conditions".

"Yet challenges remain in the form of high debt levels and subdued wage increases".

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