European Commission downgrades 2023 eurozone growth forecasts
By Michele Maatouk
Date: Friday 11 Nov 2022
(Sharecast News) - The European Commission has upgraded its forecast for eurozone growth this year, but downgraded the forecast for 2023, citing the impact of the war in Ukraine.
The EC said in its Autumn economic forecast that the bloc will grow 3.2% this year, up from a forecast of 2.7% in July. However, growth next year is now predicted to slow to 0.3% from a previous forecast of 1.4%.
Inflation, meanwhile, will ease to 6.1% in 2023 from 8.5% this year and to 2.6% in 2024.
"After a strong first half of the year, the EU economy has now entered a much more challenging phase," the Commission said.
"The shocks unleashed by Russia's war of aggression against Ukraine are denting global demand and reinforcing global inflationary pressures. The EU is among the most exposed advanced economies, due to its geographical proximity to the war and heavy reliance on gas imports from Russia. The energy crisis is eroding households' purchasing power and weighing on production. Economic sentiment has fallen markedly.
"As a result, although growth in 2022 is set to be better than previously forecast, the outlook for 2023 is significantly weaker for growth and higher for inflation compared to the European Commission's summer interim forecast."
The unemployment rate is expected to rise to 7.2% in 2023 from 6.8% this year, before falling back to 7.0% in 2024.
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