The eurozone economy is expected to expand by only 1.7 percent this year, the European Commission (EC) said yesterday, revising down its growth predictions amid financial instability in China and other emerging markets. The euro currency bloc has struggled to rev up its economic engine ever since emerging from recession in 2013. It has had to contend with high unemployment, low inflation and, more recently, a migration crisis that is straining the bloc's cash-strapped governments.

International volatility is also posing an "increasing" risk, the EC said in a new economic forecast issued Thursday, cutting its 2016 growth prediction for the 19-country eurozone by 0.1 percentage points. "Europe's moderate growth is facing increasing headwinds, from slower growth in emerging markets such as China to weak global trade and geopolitical tensions in Europe's neighborhood," EC Vice President Valdis Dombrovskis said in a statement. "The weaker global environment poses a risk," European Union Economy Commissioner Pierre Moscovici added. "There is more work to do to strengthen investment, enhance our competitiveness in a smart way and complete the job of fixing our public finances." But there are concerns that the willingness to implement tough economic reforms may be losing steam in the eurozone, with its economy buoyed by low oil prices, a depreciated euro and favorable financing conditions.

Greece has long been the eurozone's main worry, but the EC's winter forecast also painted a grim picture for Portugal. Brussels and Lisbon are struggling to see eye-to-eye on the country's 2016 budget, amid calls in Portugal for less austerity. The commission now expects the Portuguese public deficit to breach the EU-recommended level of 3 percent of gross domestic product (GDP), reaching 4.2 percent in 2015, 3.4 percent in 2016 and 3.5 percent in 2017, its forecast said. Portugal also has the third-largest public debt in the EU, which the commission now expects to reach an increased 128.5 percent of GDP this year and 127.2 percent next year.

Greece has the highest debt in the 28-country EU, but the EC revised its expected level down to 185 percent for this year and 181.8 for next year. Its deficit is also expected to fall below 3 percent in 2017.