According to the Moody’s research, slowdown of China’s economy will influence most economics in the world including the eurozone.
As National Bureau of Statistics of China reported, GDP growth rate slowed to 6.9% on a year-on-year basis in 2015 in comparison with 7.3% in 2014. This figure appeared to be the minimum for last 25 years.
As it is stated in the report, the slowdown in China’s economy and mounting of global geopolitical conflicts are among the top risks for the European economy.
At the same time, the political situation within the EU can also negatively influence the region’s economy. Among the mentioned risks are the new government formation in Spain, the probability of Portugal backtracking on some of the recent reforms after the new government comes to power, and economic recession in Greece.
Lingering low inflation is one more risk factor for the EU economy. The sluggish inflation delays deleveraging process putting the eurozone economy under pressure.
According to the experts’ estimate, the correlation of GDP and debt decreased in 11 countries out of 19 in 2016. A lower debt-to-GDP ratio is projected for Cyprus, Ireland and Slovenia, while in Greece, despite another round of financing, it will remain high.
