The euro area enjoyed a robust pace of economic expansion, which accelerated more than expected in the second half of 2017 in line with the global economy that is continuing to expand at a solid rate too, with increasing signs of synchronization, the latest ECB’s economic bulletin said.
According to Eurostat, the EU statistics office, GDP grew by 2.5% in both zones (euro area, EU28) over the whole year 2017 and by 0.7% (0.1 percentage point more than the United States) in the third quarter of 2017, meaning the European Union (EU) economy grew at its fastest pace in a decade last year.
Growing corporate profits, rising confidence and more stable political prospects helped the EU to grow faster than expected. Ongoing public debt issues in major EU countries, risk of political instability in Italy that is to hold general election in March 2018 and tensions around the EU-Britain transition agreement could generate some uncertainty that however shouldn’t derail the positive trend of the EU economy.
Germany and France emerged again as the EU’s main engines with respective national economic growth at levels unseen since 2007 when it reached 3.0% and policymakers might quickly interpret such development as the very end of the 2008 financial crisis in the EU. Meanwhile and amid tough Brexit talks, the UK economy grew slower than Europe for the first time since 2010.