2023-11-15 13:10:38
According to forecasts from the European Commission, presented on Wednesday, growth should reach 0.6% this year, a decrease compared to the estimates presented this summer.
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At the end of this difficult year, the European economy is losing momentum. In its autumn economic forecasts, presented on Wednesday, the European Commission revises its outlook downwards compared to those published this summer.
The institution estimates that growth should reach 0.6% this year in the Union and the euro area, i.e. 0.2 percentage points below the latest forecasts.
The high cost of living, weak external demand and monetary tightening explain this decline. But the European Commissioner in charge of the Economy remains hopeful for a more lenient future, particularly for households.
“Over the next two years, private consumption is expected to be the main driver of growth, as wage increases are expected to outpace inflation, strengthening household purchasing power. A robust labor market should also contribute“, estimates Paolo Gentiloni.
However, forecasts are more encouraging on the inflation front. Consumer prices continue their downward trend. They fell in October 2,9 %in the eurozone, the lowest level in two years. A year ago, inflation peaked at 10.6%.
If the decline observed last year is mainly due to the fall in energy pricesit is now generalized to all the main consumption categories.
However, obstacles remain for a recovery in 2024.
“Countries that are much more dependent on energy or have been dependent on energy from Russia and have an energy-intensive economy are those bearing the highest costs. I am thinking in particular of Germany. Germany is truly the engine of the European Union and if Germany does not develop, the rest of Europe will feel the effects“, warns Maria Demertzis, analyst at the Bruegel Institute.
For the first time, the economic forecast also covers Bosnia and Herzegovina, Moldova and Ukraine, which the EU granted candidate status for membership last year. All three countries show promising figures. The Ukrainian economy is also showing notable resistance in 2023.
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