Full text: Repair the roof when the sun is shining (171)

Chapter 1 
The European economy as a whole is on a path of robust growth with low 
inflation, as are a growing number of countries. Many signals have turned 
green, indicating the gradual narrowing of output gaps and the decrease in 
growth imbalances in the euro area. The current growth momentum leads to a 
decline in the unemployment rate throughout the euro area; unemployment 
remains high in a number of countries, though. The main deviation from this 
scenario concerns the consequences of Brexit. The British economy is slowing 
down, and will continue to do so. This will nevertheless have only a limited 
impact on Europe's other economies. In effect, growth has been gaining 
momentum and is now drawing not only on the support of monetary policy 
but also on internal dynamics. Beyond, the cyclical on-going recovery, the issue 
of long-term growth is also raised as most recent estimates of potential growth 
point to a risk of decrease. Besides, the current fiscal rules also impose to reduce 
public debt in the long term raising a risk of a new episode of fiscal consolida­
tion, that would weigh down on growth and slow down the on-going recovery. 
1.1. The growth momentum 
The world economic situation has improved in the first half of 201 7. Year on 
year, the weighted average growth of the world's major economies rose from 
2.6% to 3.2% between the third quarter of 2016 and the second quarter of 
2017. This acceleration applies to the European Union as well, with the excep­
tion of the United Kingdom. In the euro area, the year-on-year increase in GDP 
in the second quarter reached 2.3%, the best performance since the first 
quarter of 2011. 
iAGS 2018 - independent Annual Growth Survey 6th Report

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