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The European Commission trimmed its growth forecast for euro area this year as economic momentum moderated in the first half of 2018 after five straight quarters of vigorous expansion.

According to the latest Summer Interim Economic Forecast, the currency bloc is forecast to grow 2.1 percent this year and 2 percent next year. The projection for this year was downgraded from 2.3 percent.

Nonetheless, EU said growth momentum is expected to strengthen somewhat in the second half of 2018, as labor market conditions improve, household debt declines, consumer confidence remains high and monetary policy remains supportive. Inflation is forecast to average 1.7 percent both this year and next. This represents an increase of 0.2 percentage points for 2018 and 0.1 percentage point for 2019 since spring.

"Growth in Europe is set to remain resilient, as monetary policies stay accommodative and unemployment continues to fall," Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs, said.

"The slight downward revision compared to the spring reflects the impact on confidence of trade tensions and policy uncertainty, as well as rising energy prices."