In view of the consequences of the Ukraine war, the EU Commission is assuming minimal growth for the European economy next year. The Brussels authority corrected its forecast for 2023 significantly downwards to 0.3 percent in the EU and the euro area on Friday. In the summer she was still expecting growth of 1.5 percent in the EU and 1.4 percent in the euro countries.
The Commission announced that the European economy would slip into recession over the winter. The reason is, among other things, the high level of uncertainty due to the war, high energy prices and the weak purchasing power of households due to inflation.
This year, however, the situation looks better than expected. The EU Commission predicts that the EU’s gross domestic product (GDP) will grow by 3.3 percent instead of the 2.7 percent predicted in the summer for 2022. The authority is forecasting 3.2 percent growth for the euro area 2.6 percent. This is due to the strong upswing in the first half of this year.
According to the forecast, inflation will reach a new high on average for the year. This year, the analysts are assuming 8.5 percent in the euro area and 9.3 percent in the entire EU. In the summer they still spoke of a price increase of 7.6 percent for the euro countries and 8.3 percent for the EU. Prices are likely to continue to rise in the coming year as well, with inflation forecast at 6.1 percent in the euro zone and 7.0 percent throughout the EU.
The forecast for 2024 is brightening again. Then the economy in the EU should grow by 1.6 percent, in the euro countries by 1.5 percent. Inflation is expected to drop to 2.6 percent in the euro area and 3.0 percent across the EU. The European Central Bank (ECB) is generally aiming for an inflation rate of two percent in the euro area.
