EU forecasts economic recovery at "modest pace" in 2016

The European Union (EU) on Thursday predicted its economic recovery would continue at a "modest pace" next year both in the 19-country Eurozone and across the continent, in spite of expected more challenging conditions in the global economy.

Euro area real GDP was forecast to grow by 1.6 percent in 2015, rising to 1.8 percent in 2016 and 1.9 percent in 2017, according to the bloc's autumn economic forecast published by EU's executive arm the European Commission.

"Against a backdrop of declining oil prices, accommodative monetary policy and a relatively weak external value of the euro, the economic recovery this year has been resilient and widespread across member states," said the Commission in a statement.

The wider EU was also expected to gain a modest growth as real GDP is predicted to rise from 1.9 percent this year to 2.0 percent in 2016 and 2.1 percent in 2017.

EU cautioned that its recovery was set to face some new challenges posed by the slowdown in emerging market economies and global trade, and persisting geopolitical tensions.

However, the bloc's economy will "remain on recovery course," said EU Commissioner Pierre Moscovici at a press conference. The growth, although slow, will be backed by factors such as better employment performance, easier credit conditions, progress in financial deleveraging and higher investment.

The current massive refugee influx arriving the continent was also viewed as having some "positive economic impact" as the migrants will emerge as significant supplement to local labor markets and help to promote consumption, according to Moscovici. Endit