Belgium, (Brussels Morning Newspaper) The European Commission predicted in its winter economic forecast that the EU and the eurozone will narrowly avoid recession.
In a statement released on Tuesday, the body noted that it expects economic growth of 0.8% in the EU and 0.9% in the eurozone this year.
The EC pointed out that economic recovery lost momentum in Q3 last year, but avoided decline in Q4, estimating that growth stood at 3.5% in the EU and the eurozone last year.
European Commissioner for Trade Valdis Dombrovskis stressed that the EU economy “is proving resilient in the face of current challenges… we are somewhat more optimistic about growth prospects and the projected decline in inflation this year.”
He noted that the bloc still faces many challenges and added “this is no time for complacency – not least because Russia’s relentless war against Ukraine is still causing uncertainty.”
“We are determined to boost our industrial competitiveness to strengthen overall growth and resilience,” he stated and concluded “given all the geopolitical shifts and risks, it is essential to maintain the EU’s position as a leading global economic player.”
EC blames Russia
European Commissioner for Economy Paolo Gentiloni added “the EU beat expectations last year with resilient growth in spite of the shockwaves from the Russian war of aggression… and we have entered 2023 on a firmer footing than anticipated.”
He warned that a difficult period is ahead as “growth is still expected to slow down on the back of powerful headwinds and inflation will relinquish its grip on purchasing power only gradually over the coming quarters.”
According to Gentiloni, EC’s comprehensive policy response helped the EU to weather negative economic trends. He concluded that the EC will continue to tackle challenges in the coming period with resolve and ambition.
The EC noted that citizens and companies still face high inflation and energy costs, which are eroding their purchasing power and affecting business activity and investments.
In 2024, the EC expects economic growth of 1.6% in the EU and 1.5% in the eurozone. It pointed out that core inflation has not peaked, while headline inflation peaked in October last year at 10.6%.
