The eurozone is set for a challenging six months with a slowdown gripping Europe. Despite industrial production growing this month, experts have predicted the eurozone is facing a weak second half of the year. And the European Commission has also decreased its economic forecast for 2020.
Figures released today showed industrial production grew by 0.9 percent compared to last month. This was higher than the 0.2 percent predicted by economists polled by Reuters.
France had a particularly good month, as it grew by 2.1 per cent.
But Bert Colijn, senior economist for the eurozone at ING, said more improvements needed to be made to be out of the woods.
He told the Financial Times: “Don’t let the numbers fool you.
“Without an improved trade outlook, manufacturing could be in for a weak second half of the year.”
Industrial production in eurozone economies with higher exports-to-GDP shares, such as Germany, is still in danger.
German manufacturing production was more than four per cent down in May, compared to the same month last year.
Mr Colijn added the production of export-orientated goods were the worst hit.
He said: “Production seems sensitive to weakened global demand and trade uncertainty.
Meanwhile, the European Commission is still worried and has even slightly decreased its economic forecast for 2020.
Brexit uncertainty has contributed to the international tensions in trade and politics which the European Commission fears will continue to have a negative effect on growth in Europe in the longer term.
Last spring, the Commission predicted an increase of 1.7 percent in gross domestic product (GDP) without the UK.
But now EU Economic Commissioner Pierre Moscovici only expects a 1.6 percent increase.
In their summer forecast, they also lowered the outlook for the eurozone from 1.5 to 1.4 percent in 2020.