13.02.2023
There will be no economic depression in Germany, the euro zone economy will resume growth, and the trend of rising prices will gradually slow down this year – this is the latest forecast of the European Commission. The EU is generally optimistic about the economic prospects of the euro zone and the EU this year.
(Deutsche Welle Chinese website) The European Union believes that Germany has avoided the risk of economic recession this year due to its success in dealing with the energy crisis. The European Commission believes that Germany will be able to achieve 0.2% economic growth this year, while in November last year, the EU had predicted that the German economy would experience negative growth of 0.6%.
In the winter economic forecast report released by the European Commission on Monday, the euro zone will achieve economic growth of 0.9%. At one point last fall, the European Commission’s estimate was as low as 0.3%. The European Union as a whole will achieve economic growth of 0.8%, which is 0.5 percentage points higher than the autumn forecast. In this regard, the EU is expected to avoid the technical recession that had been feared at the beginning of the year, that is, two consecutive quarters of economic contraction.
The risk of “breathing” is gradually reduced
The European Commission said the latest opinion polls showed confidence in economic growth was picking up. According to data provided by the European Union, the risk of an economic downturn in the euro zone in the first quarter of this year no longer exists. With the joining of Croatia, the current membership of the Eurozone has grown to 20. “The risks of recession and gas shortages are receding, while unemployment has fallen to record low levels,” EU Economic Commissioner Paolo Gentiloni said.
The risk of a serious economic recession in Germany has also been significantly reduced, mainly because Germany has not experienced a serious energy shortage after Russia cut off its natural gas supply. The German government predicts that the German economy will be able to grow by 0.2% this year, compared with the World Monetary Fund’s forecast of 0.1%.
Regarding the economic development prospects in 2024, the EU still maintained its growth forecast of 1.6% for the entire EU and 1.5% for the euro area. The EU said the reasons for its optimistic forecast were stable gas reserves, lower gas consumption and an increase in gas suppliers.
Inflationary pressures in the euro area are expected to gradually decrease.
Inflation is gradually coming down
The inflation picture in 2023 may also be better than previously expected. The European Commission believes that this year’s EU-wide Harmonized Consumer Price Index (HVPI) will be 6.3%, compared with the previous estimate of 7.5%. The Harmonized Index of Consumer Prices in the euro zone came in at 5.6%, lower than the 6.1% forecast for the fall.
Boris Vujcic, president of the Croatian central bank, told Reuters not long ago that given that energy prices have fallen sharply compared with last year’s peak and supply chain problems are gradually easing, the European Central Bank is likely to make a decision in March this year. Lowered inflation expectations. In December, the ECB projected that consumer prices would rise by 6.3% in 2023.
The European Commission believes that the inflation situation is expected to be further eased in 2024, when the inflation rate is expected to fall back to the level of 2.5%.
(Reuters, DPA)
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