Source: FocusEconomics

Austria: Economic growth should remain robust in 2019, although the pace of expansion is expected to moderate. Public and private consumption are likely to buttress the domestic economy, with households benefiting from a tight labor market and higher wages. On the other hand, labor shortages could limit economic growth and lingering global trade tensions pose a further downside risk. The economy is expected to grow 2.0% in 2019.

Belgium: Solid economic fundamentals should support modest growth year, to be led by firmer domestic demand. A tightening labor market and healthy wage growth are expected to underpin a pick-up in household spending, while cheap financing and tighter industrial capacity are likely to sustain fixed investment. Downside risks hinge on the highly-open nature of the economy; a slowdown across the Eurozone and any escalation of trade conflicts could bruise exports. The economy is expected to grow 1.5% in 2019.

Cyprus: The recovery is set to continue in 2019 , although economic growth is expected to moderate as inflation eats into consumer-spending gains offsetting improved lending metrics and rising employment. Downside risks include high levels of public- and private-sector debt and a large, albeit gradually declining, stock of non-performing loans. The economy is expected to grow 3.2% in 2019.

Estonia: Growth is seen losing some momentum going forward, but it should remain healthy nevertheless, thanks to solid domestic demand. In 2019, tightening labor market conditions will support healthy private consumption growth, while sustained capital inflows from EU cohesion funds should prop up investment activity. The economy is expected to grow 3.1% in 2019

Finland: Economic growth in 2019 will remain underpinned by private consumption buttressed in particular by a tighter labor market and fixed investment. Nevertheless, the government’s ongoing fiscal consolidation will constrain public consumption growth. The economy is expected to grow 2.0% in 2019.

France: Recent protests will scatter in 2019 but there is an unremarkable, demand-driven growth. Household spending should benefit from income-tax cuts and an improving labor market, while fixed investment should hold up amid Macron’s reform push, elevated capacity utilization and upbeat economic sentiment. External-sector risks trend to the downside and include a pullback in global trade and any escalation of the U.S.-China trade spat. Meanwhile, next year’s budget has drawn the ire of European lawmakers and could pit the government’s reform push against Brussels’ fiscal-spending rules. The economy is expected to grow 1.6% in 2019

Germany: Solid domestic demand driven by a pick-up in public and private expenditure growth should buttress economic activity in 2019. Private consumption will likely benefit from the minimum wage increase from 1 January and a tight labor market. However, uncertainty surrounding Brexit and trade tensions between the EU and the United States cloud the outlook. The economy is expected to grow 1.6%in 2019.

Greece: Activity is seen remaining broadly stable in the coming years, supported by a tightening labor market and recovering business climate. That said, doubts remain over the country’s longer-term prospects and the government’s willingness to maintain rigid fiscal discipline and tough economic reforms. The economy is expected to grow 1.9% in 2019.

Ireland: The economy will likely lose pace in 2019, as export growth weakens amid a broad-based slowdown in the Eurozone. Furthermore, while a rebound in fixed investment is expected, private consumption growth will likely moderate as higher inflationary pressures eat into purchasing power and, in turn, private spending. Meanwhile, government spending is set to tighten as fiscal consolidation efforts are ramped up. The main risk facing the Irish economy is Brexit, especially the possibility of a hard Brexit which would likely have an adverse impact on output and employment. The economy is expected to grow 3.8% in 2019

Italy: Growth is expected to be anemic next year. Domestic demand will likely expand at a modest pace, restrained by structural weaknesses, higher interest rates, muted productivity, weak wage growth and slowing job gains due to the implementation of tighter labor laws. Moreover, given the unstable political situation, financial turbulence could resurface, exacerbating the country’s high debt risk profile and problems within the banking system. The economy is expected to  grow 0.8% in 2019.

Latvia: Expansion is seen losing steam in 2019 in face of weaker growth within the external sector amid a deterioration in the general EU business environment. In addition, labor shortages and slow productivity growth will weigh on firms’ expansion plans. Nevertheless, household consumption should remain robust, propped up by a tight labor market. This, coupled with strong investment growth, will spearhead overall growth. The economy is expected to grow 3.4% in 2019.

Lithuania: The economy is expected to decelerate slightly in 2019 , although growth should remain sturdy. Domestic demand will likely spearhead growth in 2019: Lower unemployment, a stable inflationary environment and rising wages should underpin private consumption, while EU cohesion fund inflows will help sustain strong fixed investment growth. The economy is expected to grow 3.0% in 2019.

Luxembourg: Homegrown gains, bolstered by elevated economic sentiment and recent tax reforms, should sustain broad-based but more moderate growth in 2019 . That said, household debt and investor capital flight remain downside risks. Financial services exports will be key to growth over the medium-term. The economy is expected to increase 3.2% in 2019.

Malta: Growth should remain well above the Eurozone average next year, although it will likely moderate. Sustained job gains, robust wage increases and increasing tourist inflows will continue to underpin consumer spending, whereas an expected acceleration in fixed investment should support the economy. A hard Brexit and weaker growth across the EU, however, could constrain growth. The economy is expected to grow 4.8% in 2019.

Netherlands: Economic will decelerate next year, and the economy is expected to grow 2.0%. Uncertainty over Brexit and global trade tensions remain the key downside risks to the outlook. On the other hand, a tight labor market should support private consumption and the economy is expected to be further buttressed by solid export and fixed investment growth.

Portugal: Growth is expected to edge down in 2019, mainly due to a weaker external sector, reflecting a deceleration in export growth amid a wider downturn in the Eurozone, and less dynamic imports. Moreover, domestic demand is expected to lose strength, with fixed investment expected to lose steam amid less favorable financing conditions due to the European Central Bank’s move to tighten its monetary policy stance. The economy is expected to grow 1.8% in 2019.

Slovakia: Growth should remain vibrant next year. Tighter labor market conditions, moderate inflation, a healthy inflow of immigrant workers, and solid wage gains are expected to bolster consumer spending. Moreover, with additional production coming from new car factories, industrial output is expected to expand strongly, contributing to a rise in exports. Further brightening picture, a responsible fiscal stance should translate into another fall in the public debt-to-GDP ratio. The economy is expected to grow 3.8% in 2019.

Slovenia: The economy is set to lose ground in 2019, led by a deceleration in export growth amid a broad-based downturn across the Eurozone. Fixed investment will also likely grow at a more moderate pace due to less favorable financing conditions as the European Central Bank moves to tighten its monetary policy stance. That said, household spending should be bolstered by the minimum wage hike and continue to support a healthy pace of expansion. The economy is expected to grow 3.5% in 2019.

Spain: Growth is set to decelerate in 2019  due to a slowdown in domestic demand, although it should remain healthy nonetheless. Growth in fixed investment is seen moderating on tightening financing conditions and a softening recovery in the housing market. Meanwhile, slowing employment gains due to lower tourist flows, combined with a minimum wage hike and a possible tightening of the labor code, could weigh on private spending. A sizable fiscal deficit together with a burdensome public debt also threaten the outlook. The economy is expected to grow  2.2% in 2019

Summary Economic Growth 2019

  1. Malta : 4.8%
  2. Ireland: 3.8% 
  3. Slovakia : 3.8%
  4. Slovenia : 3.5%
  5. Latvia: 3.4%
  6. Cyprus: 3.2%
  7. Luxembourg: 3.2%
  8. Estonia: 3.1%
  9. Lithuania: 3.0%
  10. Spain: 2.2%
  11. Austria: 2.0%
  12. Finland: 2.0%
  13. Netherlands: 2.0%
  14. Greece: 1.9%
  15. Portugal: 1.8%
  16. France: 1.6%
  17. Germany: 1.6%
  18. Belgium: 1.5%
  19. Italy: 0.8%


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