The European Commission boosted its 2023 forecast for growth in the eurozone by 0.2 points to 1.1%, forecasting inflation in the region to rise by 5.8%.
The European Union said in a report entitled “Economic Prospects for Spring 2023: An Improved Outlook Amidst Continuing Challenges” : The European economy continues to show resilience in a challenging global context. Lower energy prices, easing supply constraints and a strong labor market supported moderate growth in the first quarter of 2023, dispelling fears of a recession.
He predicted the growth of the European Union economy by 1.0% in 2023 (0.8% in the interim winter forecast) and 1.7% in 2024 (1.6% in the winter), indicating that against the background of underlying price pressures, the forecast for inflation in the euro area was revised up to 5.8% in 2023 and 2.8% in 2024.
The report indicated that after inflation peaked in 2022, headline inflation continued to decline in the first quarter of 2023 amid a sharp slowdown in energy prices. However, core inflation (headline inflation excluding energy and unprocessed food) has proven to be more persistent. In March it reached an all-time high of 7.6%, but it is expected to decline gradually.
He added, “The core inflation rate in the euro area is set to reach 6.1% in 2023, before declining to 3.2% in 2024, remaining above the core inflation rate in both forecast years.”
This article was originally published by RT.