Commission Lowers Growth Forecast
The European Union's economy will expand less than previously forecast in 2017, the bloc's executive arm said on Wednesday, warning of risks brought on by political uncertainty and a backlash against globalization.
In its first economic forecasts since the U.K.'s June vote to leave the EU, the European Commission, the EU's executive arm, said the bloc's modest recovery would continue, but at a slower pace than originally foreseen.
The commission said growth in the 28-country EU was expected to be 1.8% this year, in line with earlier forecasts. But it slashed its forecast for 2017, and now expects growth of 1.6%, 0.3% lower than forecast earlier this year.
Political uncertainty has been on the rise in various parts of the EU, ranging from the U.K.'s Brexit vote, to a rise in anti-European sentiment ahead of key elections in the Netherlands, France and Germany next year.
OECD Data Point To Global Pickup
A number of larger, developing economies that include China and India are set for a period of faster growth, according to leading indicators released Wednesday by the Organization for Economic Cooperation and Development.
The Paris-based research body said its leading indicators also point to steady growth ahead for developed economies, including the U.S., the eurozone and Japan. Overall, they suggest global economic growth may be set to pick up in the early months of 2017.
The OECD indicators are based on a wide set of data points that have a record of anticipating future changes in economic activity. The composite leading indicator for its 34 memberswas steady at 99.7 in September. A reading below 100 points to growth that is slower than normal.
The leading indicators also point to recoveries in Brazil and Russia. To be sure, 2016 is set to mark another year of disappointing growth for the global economy, with 2017 forecast to be only a little better. In the third quarter, economic growth picked up in the U.S., but was stable in China and the eurozone.
Consumer Prices Rose in October
Chinese consumer inflation edged up in October for a second consecutive month, helped by higher food prices, though the rise was based on a comparison with particularly weak year-earlier prices.
China's consumer-price index increased 2.1% last month from a year earlier compared with a 1.9% gain in September, the National Bureau of Statistics said Wednesday. The key measure of inflation matched a forecast by 14 economists surveyed by The Wall Street Journal.China's producer-price index rose a faster-than-expected 1.2% in October from a year earlier, compared with September's 0.1% increase. Before September's uptick, the gauge of factory prices had lingered in deflationary territory for more than four years.
Last month's inflation results were below the 3% level that Beijing has set as the upper limit of what it will tolerate this year, providing leaders with leeway to loosen monetary policy if needed to further stabilize growth.
But economists said they don't expect China to ease rates soon, given concern that this could fuel more speculative real-estate purchases and worsen industrial overcapacity and already-high corporate-debt levels.
(END) Dow Jones Newswires
November 10, 2016 02:48 ET (07:48 GMT)
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