## Regional Economic Outlook, October 2019, Europe: Facing Spillovers from Trade and Manufacturing

_Regional Economic Outlook, November 6, 2019_

## Source details

**Canonical URL:** [Regional Economic Outlook, October 2019, Europe: Facing Spillovers from Trade and Manufacturing](https://www.imf.org/en/publications/reo/issues/2019/11/04/regional-economic-outlook-october-2019-europe-48629)

## Other formats

- [Markdown version](/en/publications/reo/issues/2019/11/04/regional-economic-outlook-october-2019-europe-48629/index.md)
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## Bibliographic details
- Published: November 6, 2019
- Series: Regional Economic Outlook
- DOI: https://doi.org/10.5089/9781513514017.086

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### Summary of current developments
- Economic activity in Europe has slowed on the back of weakness in trade and manufacturing.
- For most of the region, the slowdown remains externally driven.
- Some signs of softer domestic demand have started to appear, especially in investment.
- Services and domestic consumption have been buoyant so far, but their resilience is tightly linked to labor market conditions, which, despite some easing, remain robust.
- Expansionary fiscal policy in many countries, and looser financial conditions, have also supported domestic demand.

### Growth outlook and projections
- On balance, Europe’s growth is projected to decline.
- A modest recovery is forecast for 2020 as global trade is expected to pick up and some economies recover from past stresses.
- This projection is broadly unchanged from the April 2019 World Economic Outlook.
- The aggregate projection masks significant differences between advanced and emerging Europe:
  - Growth in advanced Europe has been revised down.
  - Growth in emerging Europe has been revised up.

### Key risks
- Amid high uncertainty, risks remain to the downside.
- A no-deal Brexit is identified as the key risk in the near term.
- An intensification of trade tensions and related uncertainty could dampen investment.
- The weakness in trade and manufacturing could spread to other sectors—notably services—faster and to a greater extent than currently envisaged.
- Other risks stem from abrupt declines in risk appetite, financial vulnerabilities, the re-emergence of deflationary pressures in advanced economies, and geopolitics.

### Subjects and thematic focus
- Competition; Economic sectors; Financial markets; Inflation; Labor; Labor costs; Manufacturing; Prices; Producer prices; Wage adjustments; Wages.

*Regional Economic Outlook, October 2019, Europe: Facing Spillovers from Trade and Manufacturing*

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_Source: https://www.imf.org/en/publications/reo/issues/2019/11/04/regional-economic-outlook-october-2019-europe-48629_