Eurozone outlook raised despite ‘exceptional risks’

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Europe’s economic recovery remains on track but is vulnerable to the “exceptional risks” of Brexit and the Donald Trump administration, the EU said on Monday.

Brussels raised its growth forecasts for the eurozone through to 2018 but warned that the European Union as a whole was navigating “choppy waters.”

“The European economy has proven resilient to the numerous shocks it has experienced over the past year,” EU economic affairs commissioner Pierre Moscovici said.

“Yet with uncertainty at such high levels, it’s more important than ever that we use all policy tools to support growth.”

The 19-country eurozone will grow 1.6 percent in 2017 followed by 1.8 percent in 2018, the European Commission said in its winter economic forecast.

That compares with estimates of 1.5 percent in 2017 and 1.7 percent in 2018 published in November.

For the first time in a decade and since before the financial crisis, all of the EU 28 member states were predicted to grow during the three-year forecast period.

Bailed out Greece, which swung out of recession last year but is now at the centre of fresh fears for the eurozone, was forecast to grow 2.7 percent in 2017 and 3.1 percent in 2018.

The 28-nation bloc as a whole would grow by 1.8 percent in both 2017 and 2018, the commission said.

But the forecast warned darkly of the “exceptional risks” from Britain’s vote to leave the EU and uncertainty over Trump’s policies.

“The particularly high uncertainty surrounding this winter forecast is due to the still-to-be-clarified intentions of the new administration of the United States in key policy areas,” it said.