Although the Commission of the European Union (EU) increased the expectation of economic growth throughout the Union, it reduced the expectation of inflation.

The report “European Economic Forecasts 2023 Winter” from the EU Commission has been published. In the report, the forecast growth rate for the EU and Euro 2022 was 3.5 percent. The EU economy is forecast to grow 0.8% in 2023, 1.6% in 2024 and the Eurozone economy is forecast to grow 0.9% in 2023 and 1.5% in 2024.

In the previous “Autumn” report from the EU Commission, the EU and euro area economy was predicted to grow by 0.3 percent in 2023. With the latest report, growth expectations for the EU and the Eurozone for this year have been revised upwards by a percentage.

If these rates materialize, the EU and the Euro Zone will free themselves from the risk of entering a technical recession that was previously expected.

INFLATION EXPECTATIONS

The EU Commission lowered its inflation expectation for the euro zone from 6.1 percent to 5.6 percent for 2023. The inflation forecast for the EU was also lowered from 7 percent to 6.4 percent in 2023.

Thus, the inflation expectations of the EU and the Eurozone of the EU Commission were revised downwards for this year. Inflation is projected to be 2.8% in the EU and 2.5% in the euro area in 2024. Last year, the inflation rate was 9.2% in the EU and 8, 4 percent in the Eurozone.

In the report, this year, Germany will grow by 0.2 percent, France by 0.6 percent, Italy by 0.8 percent and Spain by 1.4 percent, and inflation will be 6.3 percent. in Germany this year and 6.3 percent in France. which would be 5.2 percent in Italy, 6.1 percent in Italy and 4.4 percent in Spain.

In the report, which stated that the EU economy was surrounded by challenges, it was recalled that core inflation increased in January.

The report noted that consumers and businesses continue to face high energy costs, more than 90 percent of the commodities in the inflation basket showed above-average price increases, and inflationary pressures are still widening.

For this reason, the report indicated that monetary tightening will continue and will force investment, and that inflation will hover above the increase in nominal wages and the weakness of consumption will continue in the short term.

Paolo Gentiloni, the EU’s commissioner for the economy, who held a press conference in Brussels on the report, said: “We enter 2023 on stronger ground than anticipated.”

Stating that the natural gas shortage and the risk of recession have eased, Gentiloni said: “However, the Europeans are in for a difficult period. Growth is expected to slow due to strong fluctuations.” he used the phrase. (AA)