EU growth expectations for 2023 fell: the eurozone is slowing
The European Union (EU) Commission reduced the economic growth expectation for this year in the Euro Zone to 0.8 percent due to the contraction of domestic demand.
In the EU Commission’s “European economic forecasts for summer 2023” report, the EU economy is expected to grow by 0.8 percent in 2023, 1.4 percent in 2024 and the EU economy the eurozone 0.8 percent in 2023 and 1.3 percent in 2024. .
In the EU Commission’s previous “spring” report, it was estimated that the EU would grow by 1 percent this year, 1.7 percent next, and the eurozone would grow by 1.1 percent this year and 1.6 percent next.
With the latest report, EU and Euro Zone growth expectations for 2023 and 2024 have been revised downwards.
The report included an estimate that Germany will contract 0.4 percent this year and grow 1.1 percent next, and that France will grow 1 percent this year and 1.2 percent next.
Recalling that economic activity in the EU weakened due to the difficult crises experienced in the first half of 2023, the report stated that the weakness of domestic demand, especially in consumption, had a more severe impact than expected on the estimate previous high and increasing levels. Consumer prices of most goods and services.
The report stated that this situation occurred despite falling energy prices, low unemployment rates, continued employment expansion and rising wages, and noted that despite a strong tourist season in many parts of Europe, manufacturing weakness continued and momentum in services slowed. Therefore, economic activity slowed down.
It was noted that the global economy performed better than expected in the first half of the year despite weak growth in China, and that the outlook for global growth and trade remained virtually unchanged compared to the spring and that the economy of the EU would not receive strong support from external demand.
In the report, “Weak growth momentum in the EU is expected to continue until 2024. “The impact of tight monetary policy is expected to continue to restrain economic activity.” The statement was included.
INFLATION EXPECTATION
The EU Commission reduced inflation expectations for the eurozone from 5.8 percent to 5.6 percent for 2023 and increased them from 2.8 percent to 2.9 percent for 2024.
The inflation forecast for the EU was reduced from 6.7 percent to 6.5 percent in 2023, while it was increased from 3.1 to 3.2 for 2024. Thus, the European Commission’s inflation expectations for The EU and the eurozone were revised downwards for this year and upwards for next.
In the report, “Inflation continued to decline in the first half of 2023 as a result of declining energy prices and easing inflationary pressures from food and industrial products.” Evaluation was included.
The report noted that energy prices are expected to continue declining in the remainder of 2023, and stated that energy prices may rise slightly again in 2024 due to the effect of high oil prices.
The report states that prices of non-food and non-energy industrial products will continue to contribute to lower inflation, and that low input prices and standardized supply chains will also contribute to this. (AA)