The European Union lowers its economic growth forecast

The EU Commission’s “European Economic Forecasts for Autumn 2023” report has been published. In the report titled “Moderate recovery after a difficult year”, the EU economy was predicted to grow by 0.6 percent in 2023, 1.3 percent in 2024, and the eurozone economy would grow by 0. .6 percent in 2023 and 1.2 percent in 2024. .

In the EU Commission’s previous “Summer” report, the EU was estimated to grow by 0.8 percent this year, 1.4 percent next year, and the eurozone would grow by 0.8 percent this year. and 1.3 percent the next. With the latest report, the growth forecasts of the EU and the Euro Zone for 2023 and 2024 have been revised downwards.

The report predicted that the EU would grow by 1.7 percent and the eurozone would grow by 1.6 percent in 2025.

FORECASTS FOR COUNTRIES

The report estimates that Germany will contract 0.3 percent this year, grow 0.8 percent next, France will grow 1 percent this year and 1.2 percent next, while Italy is expected to contract 0.7 percent this year and next. Spain was predicted to grow 0.9 percent this year and 1.7 percent next year.

The report notes that the economies of ten EU member countries will contract this year: Estonia by 2.6 percent, Ireland by 0.9 percent, Hungary by 0.7 percent, Luxembourg by 0.6 percent, Sweden and Austria 0.6 percent. contracted by 0.5 percent, Lithuania and the Czech Republic by 0.4 percent, Germany by 0.3 percent and Latvia by 0.2 percent.

INFLATION FORECASTS

The report states that inflation will be 6.5 percent in the EU and 5.6 percent in the Euro Zone this year, and that inflation will decline to 3.5 percent in the EU and 3.2 percent percent in the Euro Zone next year, and will decline to 3.2 percent in the Euro Zone in 2025. Inflation was predicted to be 2.4 percent in the EU and 2.2 percent in the Euro Zone .

The report states that the European economy lost momentum this year due to the high cost of living, weak external demand and monetary tightening, and that economic activity is expected to gradually recover in the future.

The report states that inflation fell to 2.9 percent in October, the lowest level in the last two years in the eurozone, and notes that inflation is expected to slow in the current period.

RISKS AWAITING EUROPE

The report noted that the war between Russia and Ukraine and conflicts in the Middle East increased uncertainty and downside risks to the economic outlook.

The report stated that the impact of developments on energy markets was limited at this time and that there was a risk of disruption to energy supplies.

The report notes that economic developments in the EU’s important trading partners, especially China, may also pose a risk, stating that monetary tightening in Europe may last longer and weigh more heavily on economic activity than expected, and Businesses, households and the public Finance may have difficulty adapting to the high interest rate environment.

The report mentions that weather phenomena such as heat waves, fires, droughts and floods negatively affect the economy and the environment, and states that the adoption of measures to return to more stability-oriented macroeconomic policies in Turkey began to restrict the strong growth in domestic demand.

In the report, the Turkish economy will grow 4.2 percent in 2023, 3.5 percent in 2024 and 4 percent in 2025, and inflation will be 55.4 percent this year, up from 53.6 percent in 2024 and 22.9 percent in 2025, as predicted. (AA)