Global Economic Outlook 2018: Europe: Preparing for Slower Growth

Despite politically turbulent times, most economies in Europe are enjoying robust growth momentum, with consumer spending in the driving seat. This may well continue into 2018, though we expect a gradual move toward slower trend growth to set in during the second half of next year. That is when structural headwinds, such as aging and capacity constraints for both human and physical capital, will put the brakes on the growth speed of European economies. Our outlook for 2018 shows 1.9 percent growth for both Europe and the Euro Area, while our forecast out to 2027 projects an average annual growth rate of 1.5 percent for Europe and 1.4 percent for the Euro Area.