(Bloomberg) -- The euro area will achieve growth close to the European Commission’s 0.8% forecast this year despite geopolitical headwinds, according to Economy Commissioner Paolo Gentiloni.
He told reporters ahead of a meeting of finance ministers from the currency bloc in Luxembourg on Monday that geopolitical uncertainty is having an impact.
“Overall, this is a headwind in an economic situation where we have moderate growth in the EU,” he said. “We will present our forecast mid-November but more or less we think that our previous forecast of 0.8% of growth will be not far from the reality despite the difficult situation in some countries.”
“At the same time, we acknowledge the challenges, especially for the manufacturing industry, and these challenges are confirming the importance of the issue of competitiveness,” he added.
Recent indicators have suggested the European economy is losing momentum at a time when higher real incomes were expected to fuel an uptick. Purchasing managers’ indexes showed a deterioration of activity in September, while inflation in the euro area dipped below 2% for the first time in three years.
The sluggishness has fueled investor bets that the European Central Bank will proceed with interest rate cuts at its meeting later this month.
--With assistance from William Horobin.
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