Growth in the Euro-zone
Chart of the Week for November 26-December 2, 1999
The European Commission has forecasted that the 15 nations of the European Union’s economy will grow 3% next year, up from 2.1% in 1999. For the first time in years, the EU economy is expected to outpace the United States, which the commission is forecasting a 2.8% growth rate for next year. In addition, the commission has predicted unemployment in the EU falling from 9.2% in 1999 to 8.6% next year and 8% in 2001.
For the eleven nations of the EU which have adopted the euro as their shared currency, the commission predicted the economy of this euro-zone will grow 2.9% in each of the next two years, up from 2.1% in 1999.
Ireland is expected to remain as the EU’s front-runner even though it will not be able to sustain its 8% annual growth rate since 1996. France is seen as making a recovery from the slowdown caused by the ripple effects of the Asian and Russian crises. Italy is forecasted to have the slowest economic growth of the euro-zone coupled with an 11% unemployment rate.
What does all this mean? Investors do have viable investment options outside of the United States. However, investing internationally does not come without risk. Risks associated with foreign investments include, but are not limited to, government turmoil and currency exchange risk. But through diversification, combining international and domestic investments, one’s overall portfolio risk could be reduced.
| Country | Q2 1999 GDP |
Unemployment | |
|---|---|---|---|
| Australia | 4.1% | 7.4% | Sep.* |
| Austria | 1.7% | 4.2% | Sep. |
| Belgium | 1.7% | 12.2% | Sep.* |
| Britain | 1.8% | 5.9% | Aug.† |
| Canada | 3.7% | 7.5% | Sep. |
| Denmark | 1.5% | 5.6% | Sep. |
| France | 2.1% | 11.3% | Aug. |
| Germany | 1.0% | 10.6% | Sep. |
| Italy | 0.8% | 12.0% | Apr. |
| Japan | 0.8% | 4.7% | Aug. |
| Netherlands | 3.2% | 3.1% | Sep. # |
| Spain | 3.6% | 15.7% | Aug. |
| Sweden | 3.2% | 5.5% | Sep.* |
| Switzerland | 1.1% | 2.3% | Sep.* |
| United States | 3.9% | 4.2% | Sep. |
This illustration was compiled by information from outside sources. These companies are not affiliated with ICMA-RC. This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. ICMA-RC does not offer specific tax or legal advice. Individuals are advised to consider any new investment strategies carefully prior to implementing.
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