The European Commission announced, on Monday 13 February, the upward revision of forecasts for the euro zone in 2023, to 0.9% (+0.6 points), and estimated that it should “slightly avoid” a recession this winter. Same trend for the whole of the EU, whose growth is now announced at 0.8% (+0.5 points).
These figures mark a sharp slowdown compared to the 3.5% growth recorded last year, both in the EU and in the euro zone. But the economy is resisting the consequences of the war in Ukraine better than expected. “Despite exceptional shocks”the European economy avoided a contraction in gross domestic product (GDP) in the last quarter of 2022.
“Favorable developments since the fall have improved the outlook for this year”estimated the Commission in a press release, citing in particular the fall in wholesale gas prices “well below their pre-war level”.
Lower inflation
The European Commission has also lowered its inflation forecast for the euro zone in 2023 to 5.6% (-0.5 points) and estimates that the peak has now been exceeded thanks to the lull in energy prices. . Brussels expects a slightly higher figure for the EU as a whole, with consumer price inflation of 6.4% in 2023, 0.6 points lower than the figure expected so far.
Inflation has fallen for three consecutive months, after reaching an all-time high of 10.6% in October, which “suggests that the peak is now behind us”, underlined the European executive. However, “headwinds remain strong”, warns Brussels. Households and businesses continue to face high energy prices.
Monetary policy should continue to become « plus restrictive »while inflationary pressures remain, which should “weigh on business activity and weigh on investment”. The European Commission has also warned that the uncertainty surrounding these forecasts is “high” in the context of persistent geopolitical tensions.