The Commission raised its growth forecast for the current year by 0.2 points to 1.1%, and raised growth expectations for the year 2024 in the single currency area which includes 20 countries from 0, 1 point to 1.6%, and raised growth expectations in the European Union, which includes 27 countries as a whole for the year 2023, although it remained below that recorded in the euro zone at around 1%.
“The European economy is doing better than we expected last autumn,” EU Economics Commissioner Paolo Gentiloni said in a statement over the year and into the next.
Inflation expectations in the euro zone have been revised and raised to 5.8% for the year 2023, against 5.6% previously forecast.
Consumer prices are expected to decline to 2.8% in 2024, still above the 2% target set by the European Central Bank.
The European Commission’s statement warned that “if inflation remains high, financing conditions are expected to tighten further.”
He continued: “Although the European Central Bank and other central banks in the European Union are expected to be nearing the end of the cycle of rising interest rates, the recent turmoil in the sector finance are likely to exacerbate pressure on costs and facilitate access to credit, which leads to a slowdown in the growth of investment and in particular affects investment.” in the field of housing.
While attending a meeting of finance ministers and central bank governors of the G7 countries last week, Christine Lagarde, President of the European Central Bank, stressed that efforts to combat spiraling inflation in the euro area were not yet complete.
This was confirmed by the President of the German Central Bank, Joachim Nagel, who said that measures of underlying inflation that exclude energy and food will not slow quickly in Europe, which requires the continuation the trajectory of interest rate increases in the euro zone. in September.
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