EC: September Interim Forecast
Overview:
The European Commission (EC) has upgraded its growth forecast for the Euro area and the EU in its September Interim Forecast. A stronger than expected Q2 and a modestly upwardly revised outlook for H2 should see growth of 1.8% in the EU this year compared to the 1.0% forecast in the Spring Forecast (May). Nevertheless, a slowdown is still expected in H2 as suggested by softening leading indicators. However, an anticipated expansion of 0.5% in Q3 and 0.4% in Q4 should underline that this is not a double-dip recession. Global growth may be entering a weaker patch but still remains robust. There are some signs that the export-led recovery is feeding through to slightly stronger domestic demand. Risks to the forecasts remain high, however, with financial markets still nervous about debt dynamics in some countries.