Maltese economy projected to grow fastest among European Union member states

EU lowers eurozone 2020 growth forecast

EU lowers eurozone 2020 growth forecast

"Employment growth should moderate over the forecast horizon and the unemployment rate is expected to continue declining towards an historic low in 2020", the Commission says.

However, a significant acceleration in growth is expected by the European Commission for Germany, as the country's growth is expected to increase to 1.4% in 2020, falling just below the expected eurozone average of 2020 of 1.6%.

In its "Summer 2019 Economic Forecast", released on 10 July, the commission predicted Luxembourg GDP growth of 2.4% for 2019, "before perking up again slightly to 2.6% in 2020".

Valdis Dombrovskis, vice president for the euro and social dialogue, who is also in charge of financial stability, said: "The resilience of our economies is being tested by persisting manufacturing weakness stemming from trade tensions and policy uncertainty. Due to the assumed fall in fuel prices, energy prices are expected to have a somewhat lower impact on inflation than previously forecast", the Commission said. "Domestic demand remained the main driver of growth due to strengthening investment and robust household consumption", reads the report.

For the European Union as a whole, the Commission forecast growth of 1.4 per cent this year and 1.6 per cent in 2020 (the same as in the spring forecast in May). "On the domestic side, a no-deal Brexit remains a major source of risk".

Strong final demand growth should be reflected in a pick-up in imports of both goods and services in 2019. It also lowered its estimate for next year's growth, which is now seen at 1.4% instead of the 1.5% forecast in May. An extended economic confrontation between the United States and China, together with the elevated uncertainty around U.S. trade policy could prolong the current downturn in global trade and manufacturing and affect other regions and sectors.

Touching on tensions in the Middle East, the commission said that they could raise oil prices.

"Slovenia's economic growth reached 4.5% in 2018".

Inflation is projected at 3.1 percent this year and 2.5 percent in 2020.

The commission confirmed the economic slowdown in the eurozone was mostly caused by weaker growth in Germany, the eurozone's largest economy, and Italy, its third largest.

The European Commission's next economic forecast will be the autumn economic forecast in November 2019.