Eurozone Growth Outlook Downgraded; Inflation To Slow Faster
February 15 2024 - 3:48AM
RTTF2
The euro area economy is projected to recover slowly this year
but inflation is expected to decelerate notably on falling energy
prices, the European Commission said in its Winter interim
forecast, released Thursday.
The single currency bloc is forecast to expand only 0.8 percent
this year, which was down from the Autumn forecast of 1.2
percent.
The growth projection for 2025 was trimmed to 1.5 percent from
1.6 percent.
The EU said the region entered 2024 on a weaker footing.
Prospects for the first quarter remain subdued although the economy
narrowly escaped recession in the second half of 2023.
However, the conditions for a gradual acceleration of economic
activity this year appear to be still in place, the EU said.
The inflation projection for 2024 was lowered to 2.7 percent
from 3.2 percent. Meanwhile, the forecast for next year was
retained at 2.2 percent.
Germany's real GDP is forecast to expand 0.3 percent in 2024,
down from the previous forecast of 0.8 percent. The estimate for
2025 was retained at 1.2 percent. In 2024, France GDP is expected
to grow moderately, by 0.9 percent annually, which implies a
downward revision of 0.3 percentage points.
GDP growth is forecast at 1.3 percent in 2025, marginally below
the autumn forecast of 1.4 percent.
Spain's real growth is forecast to moderate to 1.7 percent in
2024, unchanged from autumn, owing to the combination of several
factors. Growth is expected to accelerate again next year, to an
unrevised 2.0 percent, on the back of reinvigorated investment
growth and the projected positive contribution from external
demand.
Italy's GDP is forecast to expand 0.7 percent in 2024
underpinned by investment and household spending. However, the
outlook was weaker than the previously projected 0.9 percent.
Next year, real GDP is forecast to expand 1.2 percent in 2025,
unchanged compared to autumn.
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