Eurozone economy to grow fastest in 2017 in decade

The European Commission on Thursday forecast that the eurozone economy would grow at its fastest pace in a decade this year, with real gross domestic product (GDP) growth predicted to be 2.2 percent.

The autumn forecast is substantially higher than the previous one of 1.7 percent in the spring, but the growth rate will slow slightly in 2018 to 2.1 percent and 1.9 percent in 2019.

"After five years of moderate recovery, European growth has now accelerated," said Pierre Moscovici, European commissioner for economic and financial affairs, taxation and customs, at a press conference.

The European economy has performed significantly better than expected, mainly due to resilient private consumption, stronger growth around the world, and falling unemployment.

"The EU economy is performing well overall. Economic growth and job creation are robust, investment is picking up, and government deficit and debt are gradually decreasing," said Valdis Dombrovskis, vice-president of the European Commission for the euro and social dialogue.

Within the European Union (EU), downside risks relate to the outcome of the Brexit negotiations, a stronger appreciation of the euro, and higher long-term interest rates.

"By contrast, diminishing uncertainty and improving sentiment in Europe could lead to stronger-than-forecast growth, as could stronger growth in the rest of the world," the autumn forecast report said.

Looking at the EU member states, the German economy is expected to maintain a strong growth momentum over the forecast horizon, driven by domestic demand and supported by trade and a firming recovery in the eurozone.

Its real GDP is expected to increase at an average pace of around 2.1 percent per year over the 2017-to- 2019 period.

Economic activity in France is forecast to accelerate sharply in 2017, driven by strong private investment growth and in particular a strong recovery in the housing market. France's unemployment rate is set to fall substantially.

As a result, GDP growth in France is expected to reach 1.6 percent in 2017, 1.7 percent in 2018, and to slightly decelerate to 1.6 percent in 2019.

Greece's economy is growing again, and the recovery is expected to strengthen as investment rebounds and consumption rises. The labor market is recovering quickly and unemployment is expected to decline further. Public finances remain on track to meet the primary surplus targets agreed under the European Stability Mechanism (ESM) program.

As for Britain, which doesn't use the euro currency, the report said its growth for 2017 had fallen to 1.5 percent and would be even slower in 2018 at 1.3 percent, followed by 1.1 percent in 2019.

The 28-nation bloc as a whole will grow by 2.3 percent in 2017, up from the 1.9-percent anticipated in the spring.