ECONOMIC GROWTH PROJECTION FOR EUROPEAN UNION BY 2030

Abstract

The paper contributes to a discussion on developments in output for the EU-27 group over the next 11 years, up to year 2030. It departs from a discussion on arguments of the production function, with focus on sudden changes to population in Europe, its growth rate and composition. A brief study of population-decreasing events in the European historical perspective may represent an inspiring part. Reasons for inconsistency in estimated parameters of production function for European countries seems to be well-explained this way.

The projection for the next 11 years, up to 2030 has employed the production function framework. Parameters have been estimated on the period 2004 – 2016 that matches most closely conditions that one may expect over the projection horizon.

Feeding the estimated production function for the 2018-2030 forecast has employed projected population by Eurostat, while private capital investment has been generated by an ARIMA model. Projection is offered in two forms: (1) aggregated real output for the whole EU, and (2) the same category for each of the EU-27 countries.