Myth: EU economy is shrinking while the rest of the world grows.
InFact: The EU grew 2% last year, while the eurozone grew 1.6%. Both will grow at around the same pace this year and next, according to the International Monetary Fund. In the first quarter of 2016, the euro zone grew 0.6% – that was faster than Britain’s 0.4%.
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This article is an adaptation of a piece that previously appeared on InFacts.
Edited by Hugo Dixon
Hello, I am looking for some evidence on a particular issue. I found it once I think from infacts itself however, I cannot find it again. The evidence I was looking for is about the growth of the EU economy. Daniel Hanna says that the EU and Antarctica is on par with each other and that their economies are not growing. However there was some evidence from the IMF I believe which stated that the EU economy grew while the economies of Latin America and the CIS countries shrank. Could you provide a source for this please. Also could you provide any evidence to counter the claim that eu world production was 30%, now it is around 8% and by 2030ish it will be 10% so why be constrained to the eu single market. I cannot find any links on your site for this. If you could please point me in the right direction it would be much appreciated
The EU growth last year was 1.9% overall (Eurozone 1.6%, UK 2.5%) on a GDP of about $18.5tn. Which is about $350bn of growth.
India has a growth of 7.5% on a GDP of $2.4tn nominal which was $180bn of growth. Even if it keeps the stellar growth of 7-8% it will take 25 years to catch the EU.
That’s not to say trade with India isn’t important, but it’s not going to make up for the EU. At the moment the UK exports about £3.5bn to India and about £250bn to the EU countries. If our trade with the EU drops by 1% (£2.5bn) we would have to nearly double our trade with India to make up the difference. As India’s main import is crude oil, we’re not in a good position to do that. No matter how good our trade deal, we don’t make much of the things they want but can’t make cheaper themselves.
The EU is about 25-30% ($18.5tn out of around $75tn) of the world GDP and still the largest single block. The share of global GDP is falling as other nations produce more. That doesn’t mean the EU economy is shrinking, just it’s growing slower, which makes sense, my personal growth has slowed dramatically but I’m 6ft. My son has nearly doubled in size in the last year, but he’s still only 2ft tall.
Data sources, http://epp.eurostat.ec.europa.eu/tgm/refreshTableAction.do?tab=table&plugin=1&pcode=tec00115&language=en via Wikipedia.
Good luck.