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European Union Economy Profile 2017

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Economy - overviewInternally, the 28 EU member states have adopted the framework of a single market with free movement of goods, services and capital. Internationally, the EU aims to bolster Europe's trade position and its political and economic weight.

Despite great differences in per capita income among member states (from $13,000 to $82,000) and in national attitudes toward issues like inflation, debt, and foreign trade, the EU has achieved a high degree of coordination of monetary and fiscal policies. A common currency – the euro – circulates among 19 of the member states, under the auspices of the European Economic and Monetary Union (EMU). Eleven member states introduced the euro as their common currency on 1 January 1999 (Greece did so two years later). Since 2004, 13 states acceded to the EU. Of the 13, Slovenia (2007), Cyprus and Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), and Lithuania (2015) have adopted the euro; 7 other member states - not including the UK nor Denmark, which have formal opt-outs - are required by EU treaties to adopt the common currency upon meeting fiscal and monetary convergence criteria.

The EU economy is still recovering from the 2008-09 global economic crisis and the ensuing sovereign debt crisis in the euro zone in 2011. The bloc posted moderate GDP growth for 2014 through 2016, but the recovery has been uneven. Some EU member states (Czech Republic, Ireland and Spain) have recorded strong growth while others (Finland, Greece) are struggling to shake off recession. Only Greece remains under an EU rescue program, while Ireland, Portugal, Spain and Cyprus have successfully concluded their agreements. Overall, the EU’s recovery has been buoyed by lower commodities prices and accommodative monetary policy, which has lowered interest rates and the euro’s foreign exchange value. However, significant drags on growth remain, including persistently high unemployment in some member states, high levels of public and private debt loads, lackluster investment, and an aging population. These factors - in combination with low oil prices - have subdued inflation in the euro zone despite the European Central Bank’s (ECB) efforts to spur more lending and investment through its asset-buying program, negative interest rates, and long-term loan refinancing programs. The ECB in December 2016 announced it would extend its bond-buying program through 2017 to underpin the euro-zone economy and bring inflation to its statutory target of just under 2%.

Despite its fair performance, the EU economy is vulnerable to a slowdown of global trade and bouts of political and financial turmoil. In June 2016, the UK voted to withdraw from the EU, the first member country ever to attempt to secede. Uncertainty about the timing, scope, and implications of the UK’s exit could hurt consumer and investor confidence and dampen UK and euro-zone growth if trade, investment and demand suffers. Political disagreements between EU members on fiscal and economic policy may impair the EU’s ability to improve its crisis-prevention and resolution mechanisms. Risks also linger of a flareup between Greece and its euro-zone creditors that could be detrimental to a stronger recovery, especially if it damages the euro-zone’s credibility with international investors and sparks renewed fears of a broad dissolution of the single currency area. In addition, portions of the European banking sector, particularly in Italy and Portugal, are still struggling with bad loans, and the potential for mismanagement of ailing banks could lead to localized crises. Externally, the EU’s efforts to expand already large trade and investment flows through ambitious and comprehensive free trade agreement suffered some setbacks in 2016; for example, progress stalled on a US-EU deal and the European Commission’s exclusive competence to negotiate trade deals was curtailed by challenges from member states.
GDP (purchasing power parity)$19.97 trillion (2016 est.)
$19.6 trillion (2015 est.)
$18.91 trillion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$16.52 trillion (2016 est.)
GDP - real growth rate1.9% (2016 est.)
2.3% (2015 est.)
1.6% (2014 est.)
GDP - per capita (PPP)$39,200 (2016 est.)
$38,100 (2015 est.)
$37,000 (2014 est.)
note: data are in 2016 dollars
Gross national saving22% of GDP (2016 est.)
21.8% of GDP (2015 est.)
21.3% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 56.3%
government consumption: 20.5%
investment in fixed capital: 19.5%
investment in inventories: 0.1%
exports of goods and services: 43.9%
imports of goods and services: -40.5% (2013 est.)
GDP - composition by sectoragriculture: 1.5%
industry: 24.4%
services: 70.5% (2016 est.)
Population below poverty line9.8%
note: see individual country entries of member states (2013 est.)
Labor force233.7 million (2016 est.)
Labor force - by occupationagriculture: 5%
industry: 21.9%
services: 73.1% (2014 est.)
Unemployment rate9.4% (2015 est.)
10.2% (2014 est.)
Household income or consumption by percentage sharelowest 10%: 2.8%
highest 10%: 24.1% (2015 est.)
Distribution of family income - Gini index31 (2015 est.)
30.9 (2014 est.)
Taxes and other revenues45.2% of GDP (2014)
Budget surplus (+) or deficit (-)-3% of GDP (2014)
Public debt86.8% of GDP (2014)
85.5% of GDP (2013)
Inflation rate (consumer prices)0.1% (2015 est.)
0.5% (2014 est.)
Central bank discount rate0.25% (31 December 2016 est.)
0.3% (31 December 2015 est.)
note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area
Commercial bank prime lending rate0.32% (31 December 2014 est.)
0.56% (31 December 2013 est.)
Stock of narrow money$6.613 trillion (31 December 2015 est.)
$5.947 trillion (31 December 2014 est.)
note: this is the quantity of money, M1, for the euro area, converted into US dollars at the exchange rate for the date indicated; it excludes the stock of money carried by non-euro-area members of the European Union, e.g., UK pounds, Danish kroner, and Czech koruny
Stock of broad money$10.84 trillion (31 December 2015 est.)
$10.33 trillion (31 December 2014 est.)
note: this is the quantity of broad money for the euro area, converted into US dollars at the exchange rate for the date indicated; it excludes the stock of broad money carried by non-euro-area members of the European Union
Stock of domestic credit$16.57 trillion (31 December 2015 est.)
$17.12 trillion (31 December 2014 est.)
note: this figure refers to the euro area only; it excludes credit data for non-euro-area members of the EU
Market value of publicly traded shares$7.185 trillion (31 December 2014 est.)
$7.932 trillion (31 December 2013 est.)
$10.4 trillion (31 December 2012 est.)
Agriculture - productswheat, barley, oilseeds, sugar beets, wine, grapes; dairy products, cattle, sheep, pigs, poultry; fish
Industriesamong the world's largest and most technologically advanced regions, the EU industrial base includes: ferrous and non-ferrous metal production and processing, metal products, petroleum, coal, cement, chemicals, pharmaceuticals, aerospace, rail transportation equipment, passenger and commercial vehicles, construction equipment, industrial equipment, shipbuilding, electrical power equipment, machine tools and automated manufacturing systems, electronics and telecommunications equipment, fishing, food and beverages, furniture, paper, textiles
Industrial production growth rate1.4% (2016 est.)
Current Account Balance$387.1 billion (2016 est.)
$365.5 billion (2015 est.)
Exports$1.9 billion (2015 est.)
$1.808 billion (2014 est.)
note: external exports, excluding intra-EU trade
Exports - commoditiesmachinery, motor vehicles, pharmaceuticals and other chemicals, fuels, aircraft, plastics, iron and steel, wood pulp and paper products, alcoholic beverages, furniture
Exports - partnersUnited States 17.1%, China 8.5%, Switzerland 7.8%, Russia 7.2%, Turkey 4.4% (2013 est.)
Imports$1.727 billion (2015 est.)
$1.692 billion (2014 est.)
note: external imports, excluding intra-EU trade
Imports - commoditiesfuels and crude oil, machinery, vehicles, pharmaceuticals and other chemicals, precious gemstones, textiles, aircraft, plastics, metals, ships
Imports - partnersChina 16.1%, United States 11.4%, Russia 11%, Switzerland 5.9%, Norway 4.3% (2013 est.)
Reserves of foreign exchange and gold$740.9 billion (31 December 2014 est.)
note: $746.9 billion (31 December 2013)
Debt - external$13.05 trillion (31 December 2014 est.)
$14.14 trillion (31 December 2013)
Stock of direct foreign investment - at home$NA $5.148 trillion (2012)
$4.828 trillion (2011)
Stock of direct foreign investment - abroad$9.121 trillion (2012)
$8.721 trillion (2011)
Exchange rateseuros per US dollar -
0.9214 (2016 est.)
0.885 (2015 est.)
0.885 (2014 est.)
0.7634 (2013 est.)
0.7752 (2012 est.)
Fiscal yearNA

Source: CIA World Factbook
This page was last updated on July 9, 2017