On the 15th (local time), the European Union’s executive committee slightly raised its economic growth forecast for this year’s Eurozone (20 countries using the euro).
The EU Commission said in a press release titled “2023 Spring Economic Outlook” released on the same day that the eurozone economic growth rate is expected to be 1.1% this year. It increased 0.2 percentage points from last winter’s forecast of 0.9 percent.
As a result, the economic growth forecast for all 27 EU countries has been raised from 0.8 percent to 1.0 percent.
In 2024, the eurozone economic growth rate is also expected to reach 1.6%, 0.1 percentage points higher than the previous forecast.
It is believed that the crisis has passed as energy prices, which soared in the aftermath of Russia’s invasion of Ukraine in February last year, regained stability relatively quickly to pre-war levels.
“The European economy is in a better situation than expected last fall,” said Paolo Gentiloni, the EU’s finance commissioner. “We avoided the winter recession (last) and are ready for stable growth this year and next year.”
However, inflation is expected to continue for the time being.
The board of directors predicted that the euro zone consumer price growth rate will be 5.8 percent this year. It increased 0.2 percentage points from the previous forecast.
It was expected to be 2.8 percent in 2024. This is still above the European Central Bank’s (ECB) consumer price growth target of 2%.
Core inflation, excluding highly volatile energy and food, is expected to be 6.1% this year and 3.2% in 2024.
“There are still many risks to observe,” said Baldis Dombrowski, the EU’s senior vice president for economic affairs. “Continuously high core prices can erode consumers’ purchasing power and slow investment expansion.”
He then stressed, “It is important to be careful about fiscal policy and maintain investment momentum to curb inflation.”
