Global economy is cooling
The world economy is growing by a little more than three percent in 2016. That is the lowest value since the 2009 crisis and BDI does not expect any strengthening in 2017 either. In addition, world trade is growing considerably more slowly than at the beginning of the millennium. The export-oriented European economy is suffering and the contribution of external trade to growth is therefore negative.
Private consumption continues to be the most important growth driver
Unemployment rates in Europe continue to decline and are around 8.5 percent on average. Rising employment and real wages are stimulating private consumption, which is the characteristic of European growth. Investments are suffering from global uncertainty and are growing only weakly.
Low growth demands an ambitious package of measures now
Fiscal policy must use available leeway to increase growth and productivity. Complementary industrial and innovation policy initiatives are missing at national level. This economic policy package can also be carried out in three or four large Member States without full coordination in the EU institutions.
You will find further information in BDI’s growth outlook for Europe.