Higher interest rates, a weak global economy and cautious consumers: the European economy is far from booming. Now the EU Commission is becoming even more pessimistic.
According to a forecast by the European Commission, the EU economy will grow more slowly this year than recently expected. The authority expects growth of 0.6 percent for the EU and the euro zone, according to an estimate. This means she is lowering her forecast for the second time in a row. In September, the commission had assumed an increase of 0.8 percent.
The European economy has lost momentum this year amid high living costs, weak foreign demand and tighter monetary policy, the Brussels authority said.
According to estimates, the economy in Germany will shrink by 0.3 percent this year. In September, a decline of 0.4 percent was forecast for the EU’s largest economy. The authority expects the German economy to grow by 0.8 percent in 2024 (previously 1.1) and 1.2 percent in 2025. This means that Germany remains below the expected average in the Eurozone.
Across the EU, the Commission has also lowered its forecast for the coming year and now expects growth of 1.3 percent (previously 1.4). The authority estimates economic growth in the euro zone in 2024 at 1.2 percent (previously 1.3). For 2025, it forecasts growth of 1.7 percent in the EU (Eurozone: 1.6).
Expected inflation in the euro zone for this year remained at 5.6 percent. A decline is expected for the coming year.
Source: Stern
