The euro zone economy is expected to turn a corner in 2024, as faster growth in southern Europe offsets continued stagnation in Germany, according to new European Commission forecasts.
The European Commission predicted that the euro zone would grow by 0.8% this year, unchanged from its previous forecast, but slightly better than last year's 0.4% growth.
As for next year, the committee is forecasting growth of 1.4% next year, a slight downward revision to its winter forecast.
Germany, the eurozone's largest economy, suffered a mild recession last year and is expected to be more or less stagnant in 2024, and France's economy is likely to continue to stagnate.
Rather, growth will be driven by the stronger performance of peripheral economies. Portugal is expected to grow by 1.7%, Spain by 2.1% and Greece by 2.2%. According to the latest forecast.
“Economic convergence within the EU will continue to grow, with economic expansion in the EU's southern rim regions continuing to outpace growth in northern and western Europe,” the European Commission said.
Economic Commissioner Paolo Gentiloni said: “The EU economy recovered significantly in the first quarter, showing that we have turned the corner after a very difficult 2023.”
“We expect growth to accelerate moderately this year and into next as consumer spending is supported by lower inflation, a rebound in purchasing power and continued employment growth,” he said.
Inflation is expected to continue falling over the next few years, at a slightly faster pace than expected in February.
It is expected to fall from 5.4% in 2023 to 2.5% this year and 2.1% next year.
“While the sharp decline in retail energy prices was the main driver of lower inflation throughout 2023, underlying inflationary pressures begin to ease in the second half of 2023 amid weak growth momentum,” the forecast said.
of european central bank It is widely expected to cut interest rates next month to reflect further developments in inflation.
The ECB said after its last interest rate decision that further evidence that inflation was falling to target would make it “appropriate to reduce the current level of monetary policy limits.”
Provided by: CityAM
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