European Commission Reduces US Growth Forecast to 2.7% for 2016

MOSCOW (Sputnik) — The European Commission has reduced its 2016 growth forecast for the United States to 2.7 percent, in its winter economic forecasts released Thursday.

"While private consumption and fixed investment showed resilience throughout the year, net exports have weighed on growth and, due to the combined effects of a strong US dollar and deteriorating external environment, will remain a drag throughout the forecast horizon," the Commission said, reducing its forecast by 0.1 percent compared to its autumn report figures.

Aside from a strong dollar and weaker global demand for US exports, including among the United States' main trade partners, the report mentions the contraction of the energy sector and the slowdown in manufacturing amid financial volatility as key factors subduing GDP growth.

The fall in oil prices also exerts upward pressure on US growth, boosting consumption and non-energy investment. While the United State's December budget deal removes fiscal uncertainty, the uncertain results of the 2016 presidential election are set to weigh on the economy somewhat, the forecast warned.

The world economy entered a period of turbulence in 2015, with plummeting oil prices, volatile stock markets, falling commodity prices, destabilized exchange rates and falling growth rates sparking fears of a renewed global recession.