EU Automotive Industry – Quarter 3 2017
EU Economic Outlook
So far this year, the EU economy has performed significantly better than expected. The 2.3% increase in GDP marks the highest growth rate in 10 years. In its Autumn Forecast, the European Commission said to expect more moderate GDP growth of around 2.1% in 2018 and 1.9% in 2019.
However, it should be noted that next year’s projections will be affected by the outcome of the ongoing Brexit negotiations between the EU27 and the United Kingdom.
After a long period of low inflation due to dropping energy prices, the EU’s HICP1 inflation indicator increased over the first nine months of this year. According to the Commission’s latest estimates, the HICP is expected to reach 1.7% by the end of 2017. EU inflation is projected to remain stable at around 1.7% next year, rising slightly to 1.8% in 2019. As a result, private consumption growth is expected to slow down as households’ purchasing power will be reduced.
Thanks to improved labour market conditions, the European Union’s unemployment rate is expected to continue decreasing in the coming years, reaching its lowest level since early 2009.
Unemployment is expected to decline from 7.8% in 2017 to 7.0% in 2019, as job creation will be sustained by strong domestic demand and moderate wage growth.