Europe is BIGGEST THREAT to global economy: ‘VICIOUS DEBT CRISIS’ incoming, experts warn
THE economic crisis engulfing the eurozone is threatening the growth of the global economy, with the deepening struggles in Italy and Germany driving the bloc into a debt disaster, experts have warned.
By PAUL WITHERS
Express.co.uk
Wed, Feb 13, 2019
Last week, eurozone growth forecasts were slashed by the European Commission as fears continue to intensify over the bloc’s biggest economies. In its latest quarterly forecasts, the Commission warned eurozone growth will slow to 1.3 percent this year from 1.9 percent in 2018. Growth is expected to rebound slightly to 1.6 percent in 2020, but alarm bells will be ringing as the new estimates are less optimistic than the Commission’s previous forecasts.
In November, Brussels said it expected eurozone growth to hit 1.9 percent this year and 1.7 percent in 2020.
The Commission is also forecasting growth in a 27-nation European Union – without Britain due to Brexit – to dramatically slow to 1.5 percent this year from 2.1 percent in 2018.
The recent gloomy forecasts have spooked investors, who fear the crisis dominating the eurozone could drag down the global economy with it.
“It’s clear China is going through a slowdown, but there’s also a strong amount of stimulus in the pipeline. However, in Europe, things are deteriorating quite fast.”
Germany’s crumbling economy – Europe’s biggest at £3.1trillion – has magnified the seriousness of the financial problems engulfing the bloc.
In December, industrial output fell for the fourth consecutive month, down 0.4 percent on November.
This was in contrast to a forecast from Reuters for an increase of 0.7 percent. Industrial output was down 3.9 percent on December 2017.
Earlier this month, Germany’s lucrative manufacturing sector plunged into contraction territory, slumping to 49.7 points in January from 51.1 in December, according to the latest figures from IHS Markit.
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