MercoPress. South Atlantic News Agency

Recovery at “a modest pace” in the EU and Euro-zone next year

European Commissioner Pierre Moscovici said EU economies would “see growth rising and unemployment and fiscal deficits falling”

The economic recovery within the European Union and the eurozone should continue at “a modest pace” next year, the EU has forecast. The economy of the 28-nation EU is set to grow by 1.9% this year, 2.0% in 2016 and by 2.1% the year after.

 The 19-nation eurozone is expected to grow by 1.6% this year, rising to 1.8% next year and 1.9% in 2017. The EU said growth was being helped by factors such as low oil prices and a weaker euro exchange rate.

Another factor cited was the European Central Bank's attempts to stimulate the eurozone economy through its bond-buying programme.

However, the report also warned that new challenges to growth were appearing, including the slowdown in China and emerging market economies, and geopolitical tensions.

European Commissioner Pierre Moscovici said EU economies would “see growth rising and unemployment and fiscal deficits falling”, but the effects would be unevenly spread across member states.

He noted the global economic outlook remained uncertain, warning EU nations not to let up in their efforts to reform their economies.

The EU's executive arm expects three million migrants to arrive in Europe by 2017 as they flee war and poverty in Syria and other conflict zones.

It predicts the increase in labour supply could boost GDP growth in the medium term provided the correct policies are in place.

Greece, which is receiving up to €86bn in a three-year bailout, is expected to see its economy shrink by 1.4% this year and by 1.3% in 2016, but is forecast to grow by 2.7% in 2017.

The EU also noted that the recent Volkswagen emissions scandal could affect business.

“Possible spillovers from Volkswagen's manipulation of diesel engine emission tests to other sectors via production chains or confidence effects could create downside risks to corporate investment,” it said.