Euro area growth expected to hit 0.8% – EU’s Gentiloni

The euro area is projected to achieve growth close to the European Commission’s forecast of 0.8 per cent this year, despite ongoing geopolitical uncertainties, according to Economy Commissioner Paolo Gentiloni.

Speaking ahead of a meeting of finance ministers in Luxembourg, Gentiloni acknowledged the impact of geopolitical tensions but maintained that the forecast remains realistic.

“We will present our updated forecast in mid-November, but we believe our previous estimate of 0.8 per cent growth is still valid, despite the difficult circumstances in some countries,” he stated. However, he also highlighted challenges facing the manufacturing sector, emphasising the need to address competitiveness issues.

Recent economic indicators have shown a loss of momentum in the European economy, with purchasing managers’ indexes indicating a decline in activity for September.

Additionally, inflation in the euro area fell below 2 per cent for the first time in three years. This economic sluggishness has led to increasing investor speculation that the European Central Bank may consider interest rate cuts in its upcoming meeting later this month.

Attribution: Bloomberg

Subediting: M. S. Salama