The slides of the presentation can be found here.
[slide 1]: Introduction slide
Bienvenue à cette présentation des prévisions économiques d'automne 2015 de la Commission européenne.
J’ai essentiellement trois messages à passer aujourd’hui. Le premier, c’est que la reprise économique va continuer en 2016 et 2017, avec des moteurs sans doute un peu différents. Le second c’est que l’amélioration de la situation budgétaire des Etats membres se poursuit, y compris pour la dette à partir de 2016. Enfin, et c’est une nouveauté en vue de la recommandation pour la zone euro que nous adopterons mi-novembre, nous analysons la convergence entre pays de la zone euro, qui reste insuffisante.
[slide 2]: Moderate recovery continues
Commençons donc par la reprise économique dans la zone euro et dans l’ensemble de l'Union européenne qui est entrée dans sa troisième année consécutive et devrait se poursuivre.
Bien que plus modérée que par le passé, la reprise a jusqu'à présent résisté face aux récentes incertitudes. Les effets du ralentissement des marchés émergents et de l'importante chute du commerce international de ces derniers mois devraient cependant commencer à se faire ressentir. Je vais y revenir. De plus, les risques pesant sur la croissance ont clairement augmenté du fait de cette dégradation de l'environnement exterierur, y compris de la situation géostratégique international. Concrètement, dans la zone euro, le PIB devrait croître de 1,6% en 2015, de 1,8% en 2016 et de 1,9% en 2017. Pour les 28, nous prévoyons une croissance de 1,9% en 2015, de 2,0% en 2016 et de 2,1% en 2017.
[Slide 3]: Tailwinds still supporting growth
Comme nous l'avions prévu au printemps, la reprise économique de la zone euro cette année a été portée par une combinaison de facteurs, parmi lesquels la faiblesse des prix du pétrole et un taux de change de l'euro relativement bas si on le compare à l'année dernière. Ceci reste vrai dans nos prévisions d’automne. Premièrement, après un rebond aux alentours de 60$ le baril au printemps, le cours du baril de pétrole Brent se situe environ à 48$ actuellement. Compte tenu de ces développements, nos hypothèses de prix du pétrole pour 2015 et 2016 ont été revues à la baisse par rapport aux prévisions de printemps. En 2017, les prix devraient également rester faibles. La chute des prix du pétrole a considérablement réduit les coûts énergétiques pour les entreprises et les ménages, permettant un accroissement des marges bénéficiaires des entreprises et du pouvoir d'achat des ménages.
Deuxièmement, la dépréciation de l'euro a été amplifiée par la décision d'assouplissement quantitatif de la BCE en janvier 2015. Elle a eu un impact positif pour les exportateurs de la zone euro et leur a permis de gagner des parts de marché. Le taux de change de l'euro devrait continuer à soutenir la reprise économique à court terme.
Enfin, le programme d'assouplissement quantitatif de la BCE a quant à lui permis d'améliorer les conditions de financement dans la zone euro et l'on observe un coût du crédit qui reste bas pour les ménages et les entreprises. La croissance annuelle du crédit dans la zone euro pour les entreprises est d'ailleurs redevenue positive depuis l'été, pour la première fois depuis le printemps de 2012, alors que la liquidité supplémentaire fournie par le programme de la BCE incite les banques à prêter davantage.
[Slide 4] Increased, but temporary, global headwinds
Les perspectives pour la croissance mondiale et les échanges commerciaux mondiaux se sont considérablement détériorées depuis le printemps. Cela est principalement dû à un ralentissement économique plus important qu'escompté dans les pays émergents et un ajustement plus rapide en Chine. Le basculement du moteur de la croissance mondiale des pays émergents vers les économies avancées est bien illustré sur le graphique derrière moi. Nous projetons une croissance économique en Chine de 6.8% en 2015 et 6.2% en 2017. Ce scénario "d'atterrissage en douceur" repose sur l'hypothèse que le rééquilibrage économique en Chine – d'une croissance basée surtout sur l'investissement vers une croissance plus équilibrée avec un rôle majeur pour la consommation – se passe sans frictions majeures. Le ralentissement dans les pays émergents devrait cependant laisser place à un rebond progressif de la croissance à partir de 2016. La croissance mondiale (hors Union européenne) devrait ainsi ralentir, passant de 3.7% en 2014 à 3.3% cette année, avant de se renforcer graduellement et d'atteindre 3.8% en 2016 et 4% en 2017. Ce renforcement graduel de la croissance mondiale et du commerce mondial devrait soutenir la demande extérieure des exportations européennes, même si moins que l'on s'attendait au printemps.
[Slide 5] Other factors are set to support growth
I would like now to turn to an interesting economic development for the years to come. The strength of these tailwinds is set to gradually fade and other factors should assume a larger role in driving the recovery in Europe in 2016 and 2017:
First, the fruits of recent structural reforms – including of labour and product markets and tax systems – in some Member States should become increasingly tangible. Second, while the pressure to reduce debt remains high in some Member States, it should gradually become less of a constraint on companies' and households' spending.Third, after several years of fiscal consolidation, fiscal policy is set to remain broadly neutral – in other words, neither tightening nor loosening – while monetary policy is expected to remain highly accommodative.
[Slide 5b] Surge in refugees is good for growth
Another important development since our last forecast is the influx as refugees. Our forecast makes a first preliminary assessment of the economic impact of this influx, based on several assumptions that would need to be checked against reality in the months to come. It takes into account additional public expenditure and additional labour supply from recognised refugees who will gain the right to work. The impact on economic growth would be small but positive for the EU as a whole, raising GDP by 0.2-0.3% by 2017. The impact could, however, be more significant for individual countries, in particular for destination countries. The expected rise in the labour force over the forecast horizon, could also translate into additional employment but this will crucially depend on efforts to integrate the refugees. The box on page 48 of the forecast document gives further details, also on the underlying assumptions of the calculations.
[Slide 6] Growth map 2016
Let me now turn to our growth map of Europe for 2016. Economic activity should be on the rise in nearly all Member States next year, with an acceleration expected in 2017 in most of them. Among the largest EU economies, GDP growth in 2016 is expected to be above the EU average (of 2.0%) in Poland at 3.5%, Spain at 2.7%, the UK at 2.4% and the Netherlands at 2.1%. Economic growth in Germany at 1.9% will be just above the euro-area average (1.8%). The robust labour market, favourable financing conditions and additional public spending to host and integrate the large number of asylum seekers will contribute to growth. In Italy, growth is expected to pick up to 1.5% in 2016, driven by domestic demand. En France, la croissance du PIB devrait atteindre 1,4% en 2016, grâce à une consommation des ménages toujours robuste et la reprise de l'investissement. Among other Member States, Ireland and Romania are set to grow at above 4%, while Latvia, Luxembourg and Malta are projected to grow at 3% or above. Finally, as regards the two Member States in economic adjustment programmes, Cyprus’ economy is expected to grow by 1.2% this year and 1.4% next year, driven by stronger private demand. Greece is projected to slip back into recession in 2015 with GDP set to contract by 1.4% – though this is almost one percentage point better than projected in August, when the baseline for the ESM programme was set – and by 1.3% in 2016. As I indicated in Athens yesterday, growth should return in the second half of next year to reach 2.7% in 2017 as the implementation of the programme enables a return of confidence and investment.
[Slide 7] Private consumption remains the main growth engine
Turning now to the main components of growth, private consumption has been fuelling the pick-up in domestic demand. It is expected to maintain its growth momentum in the near term. Supporting this positive development are the continued rise in nominal incomes and the boost to purchasing power from lower energy prices. In 2016 and 2017, improving labour market conditions and still relatively low consumer price inflation should further support private consumption growth.
[slide 8]: Improving labour market conditions
Labour market conditions continue to improve slowly but steadily given the rising economic activity. The unemployment rate is expected to decline gradually, but it remains too high and it varies greatly across Member States. Employment is expected to grow by about 1% over the forecast horizon in both the euro area and the EU. This pace of job creation and of economic growth looks unlikely to reduce unemployment rates to below pre-crisis levels. Countries which have implemented labour market reforms should see further gains in employment. These include Greece, Italy, Spain and Portugal. In 2016, unemployment is expected to fall to 10.6% in the euro area and 9.2% in the EU, and to decline further in 2017.
[slide 9]: Low inflation in the euro area is supporting purchasing power
This year, inflation is expected to remain close to zero, mostly because of the renewed fall in energy and commodity prices. This is having a positive impact on households' purchasing power. In contrast, core inflation – that is, without the more volatile energy and food price components – is showing some signs of strengthening, reflecting the increase in private consumption. Over the forecast horizon, the recovery in oil prices along with wage increases should push prices further up. As a result, annual inflation in the euro area is expected to rise from 0.1% this year to 1.0 % next year, and to pick up to 1.6% in 2017, which is of course a welcome development as it reflects a normalisation of economic conditions.
[slide 10]: Investment recovery fragile – but set to strengthen
Investment growth, though strengthening, remains weak when compared to past recoveries as you can see on this graph. Subdued demand expectations, high uncertainty and the persistent need to reduce debt in some Member States are still weighing on investment decisions. Construction investment should recover, thanks to the rise in households' real disposable income as well as easier access to financing. Equipment investment is supported by low oil prices and improved profit margins as well as low financing costs, and it is forecast to strengthen along with the brighter outlook in global demand in 2017.
[slide 11]: Risks to the growth outlook
To conclude on the growth perspective, I would like to mention some of the risks. The balance of risks to the growth outlook has shifted to the downside as external risks have increased. In particular, the negative impact of the weakness in some emerging market economies could turn out to be larger than envisaged, and notably a "hard landing" in China would be detrimental. Financial market volatility could increase given the uncertainty surrounding the normalisation of monetary policy in the US with potential consequences on asset prices and capital flows. Geopolitical tensions are keeping uncertainty at high levels and could become a larger impediment to investment spending than currently expected. Legacies from the crisis may continue to weigh more heavily on investment activity than expected, and fading tailwinds could not be replaced by more endogenous growth drivers.
But there are also upside risks, namely: Stronger or more persistent tailwinds would have a positive impact on economic growth. A stronger-than-expected revival in global growth dynamics and world trade could push demand for European exports more than expected. A more favourable impact from already-implemented and future structural reforms could also provide additional stimuli to economic growth.
[slide 12]: Budgetary outlook for 2016
The second important message coming out of these forecasts is the improving fiscal outlook, as the reduction in general government deficits continues: In the euro area, the deficit is forecast to stand at 2% of GDP in 2015 and to decline to 1.8% in 2016 and 1.5% in 2017. In the EU as a whole, the deficit is forecast at 2.5% of GDP in 2015 and to decline to 2% next year and 1.6% in 2017.
In most Member States, deficit ratios are projected to fall in 2015 and to continue on this path in 2016 and 2017. In the euro area, we expect only France, Spain and Greece to have deficits above the 3% of GDP threshold in 2016. The fiscal policy stance is expected to be broadly neutral in the euro area in 2015 and 2016, as the changes to the structural balance should be broadly nil in both years. The debt-to-GDP ratio is forecast to decline as of this year from the peak reached in 2014, and to reach 91.3% in the euro area and 85.8% in the EU in 2017. Our forecast takes into account revenue and expenditure trends and the inclusion of measures that were incorporated in the Draft Budgetary Plans for 2016, as submitted by euro-area Member States to the Commission by 15 October 2015. The forecast for 2017 rests on a no-policy-change assumption, since policy measures for that years have in most cases still to be specified by national authorities.
[slide 13]: Convergence in the euro area
Finally, and this would be my third message today, I would like to conclude with a few remarks on the issue of convergence in the euro area. In our Communication on steps towards completing the Economic and Monetary Union last month, we committed to work to facilitate convergence between euro area Member States. Looking at our Autumn Forecast, the picture so far is mixed.
First, potential growth paths are re-converging – but only very slowly. Some countries are catching up thanks to the implementation of structural reforms, but a timely implementation of these reforms is needed in order to improve the efficiency of labour- and product markets and further increase growth potential.
Second, labour-market conditions are improving – but disparities remain high. Unemployment is receding in most Member States but will still be 25.8% in Greece and 20.5% in Spain compared with 4.9% in Germany in 2016.
Third, the debt-to-GDP ratio has peaked in 2014 in the euro area as a whole – but in some Member States it is still expected to increase next year: among others, in Greece, France, Spain and Belgium. Finally, as regards the current account balance, former deficit countries have adjusted – while, overall, large savings and investment imbalances remain.As a result, the current-account surplus reaches a historically high level in the euro area. These positions are not expected to change significantly over the forecast horizon.
[Slide 14] Growth map 2016
To sum up, these are my key takeaways from this year's Autumn Forecast:
- The European economy remains on recovery course.
- Unemployment will continue to fall while remaining too high in many countries.
- The recovery is still supported by well-known tailwinds, including low oil prices which are set to persist into 2016.
- Other positive factors are increasingly taking over, such as the impact of structural reforms.
- We project a soft landing for the Chinese economy and a rebound in other emerging economies' growth from 2016.
- Inflation will gradually increase from its current very low level while remaining moderate.
- Overall deficit and debt levels in the EU will decline.
Finally, further efforts are needed to support convergence in the euro area.
Today's forecast will provide the basis for a number of policy decisions to be taken over the next couple of weeks, notably the Commission’s Opinions on the euro area Member States’ Draft Budgetary Plans. The forecast will also feed into the preparation of the Annual Growth Survey and the Alert Mechanism Report on Macroeconomic Imbalances, which we will also be presenting later this month as we kick off the next European Semester of economic policy coordination.
If you would like to know about our policy conclusions deriving from today’s figures, I must therefore invite you to have a little more patience.
On our Autumn Forecast itself, I am happy to now take your questions.