The slowdown in growth is driven by households looking to save every penny in the face of rising borrowing rates and reduced state aid to cover energy costs that soared after Russia's invasion of Ukraine two years ago. There is.
European Commission Executive Vice President Valdis Dombrovskis said in a statement: “Europe's economy is a little weaker than expected after a painful 2023, but the recovery should gradually accelerate between this year and 2025.''
The committee did its best to interpret the data positively. Some forecasts predict that eurozone growth will start to “stabilize” in the second half of this year, increasing by 1.5% in 2025.
Meanwhile, inflation is expected to slow sooner than expected, despite continued tensions in the Red Sea. Inflation is expected to fall to 2.2% by the end of 2025 from 2.7% this year, slightly above the European Central Bank's 2% target.
The European Commission acknowledged that its aggressiveness remains vulnerable to geopolitical risks. If the Red Sea becomes more dangerous for cargo ship navigation, the Middle East conflict could worsen and shipping costs could rise.
Economic Commissioner Paolo Gentiloni said: “Geopolitical tensions, an unprecedentedly volatile climate and the number of important elections taking place around the world this year all contribute to heightened uncertainty surrounding this outlook. “
