Marco Buti, András Chabin, Björn Döhring, João Leal, 13 July 2018

Next week, after ten days of swift, flat riding, the Tour de France reaches the Alps. The European economy, meanwhile, has been pedalling uphill since the beginning of this year. 2017 was easy riding as strong global growth boosted domestic investment, but economic growth has had to move into lower gear in the first half of 2018 as this transmission is no longer working properly, and escalating trade conflicts could derail it. This column presents the European Commission’s Summer 2018 Interim Forecast, which suggests that a tightening of global financial conditions could add to the headwinds, though central banks' balance sheets will remain large for a long time, and domestic fundamentals in the euro area remain strong. 

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