The Commission raised its growth forecast by 0.2 points, to 1.1 percent. “The European economy is in a better position than we expected last fall,” European Commissioner for the Economy Paolo Gentiloni said in a statement.
The European Commission on Monday strengthened its forecast for economic growth for the year 2023 in the euro area, while raising its inflation forecasts in the single currency area.
The Commission’s expectations for the spring are more optimistic than those issued late last year, although the decline in inflation from record levels was much slower than expected.
The Commission raised its growth forecast by 0.2 points, to 1.1 percent. “The European economy is in a better position than we expected last fall,” European Commissioner for the Economy Paolo Gentiloni said in a statement.
He added, “Thanks to tireless efforts to enhance our energy security, a remarkably resilient labor market, and easing supply restrictions, we avoided a recession during the winter and are preparing for moderate growth this year and next.”
Brussels also raised its growth forecast for 2024 in the single currency area, which includes 20 countries, by 0.1 point, to 1.6 percent.
It also raised expectations for growth in the European Union, which includes 27 countries as a whole, for the year 2023, although it remained less than that recorded in the euro area by about one percent.
Inflation expectations in the euro area were also revised and raised to 5.8 percent for the year 2023, compared to 5.6 percent in the previous forecast.
Consumer prices are expected to decline to 2.8 percent in 2024, still above the 2 percent target set by the European Central Bank.
“While inflation remains high, financing conditions are expected to tighten further,” the statement warned.
He continued, “Although it is expected that the European Central Bank and other central banks within the European Union will approach the end of the cycle of raising interest rates, the recent turmoil in the financial sector is likely to exacerbate pressure on the cost and ease of access to credit, which leads to a slowdown in investment growth and affects in particular investment.” in the field of housing.
