Europe is experiencing slower growth from its emerging economies than most of the general population would like to see, but truthfully experts feel confident that the European economy is on an upward trend that is going to continue. And they have good reason to be hopeful. Here is a glimpse of what the coming year holds for the European economy.
Contributing Factors to Economic Increase
While geopolitical concerns and fluctuating global economies are putting pressure on the European economy, affecting trade and exports, there are more positive elements that are influencing the economic upturn in Europe. Such aspects include:
- Lower exchange rates for the euro. This strengthens the euro, giving it more spending power.
- Lower oil prices. The decrease in oil prices has profited consumers with lower energy bills, so consumers have more money to put back into the country.
- Lower interest rates. Despite the trend being set by the US, European financial institutions are resisting the pressure to raise interest rates, enabling citizens to manage their finances.
- Supportive fiscal period.
Unemployment is also slowly decreasing, with projected figures of 8.7 by the end of 2017 as opposed to 9.5 in 2015. Budget deficits and GDP are also shrinking across the board, though at varying degrees depending on location.
Barriers to Growth
Still, there are elements that would prevent Europe from rising once again as the world leader in economic health. The euro is inflating at a snail’s pace, and that is worrisome for some economists. They’re looking towards the European Central Bank to lay down a few helpful policies to encourage the rate and stabilise the situation to prevent any possible damage to wages and investments. The bank has been supportive of these efforts in the past, lowering interest rates and sliding additional revenue into the economy.