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An increase of 0.9 percent is expected for the EU in 2024 and 1.7 percent in 2025. The economic output of the Eurozone is expected to increase by 0.8 and 1.5 percent respectively. Economic growth of 0.6 percent is expected for Austria this year and 1.4 percent next year.
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In its autumn estimate, the Brussels authority had already assumed that the economy would grow more slowly this year than previously expected. In November, however, their forecast for 2024 was still 1.3 percent for the EU and 1.2 percent for the euro zone. At that time, the domestic economy was predicted to grow by one percent.
Annual inflation is expected to fall faster than recently forecast: in the countries with the common euro currency, it is expected to fall further to 2.7 percent in 2024 and to 2.2 percent in 2025, while inflation in the EU is expected to be 3.0 percent this year to 2.5 percent next year. The Austrian figure is still above average at 4.0 percent this year and 3.0 percent in 2025.
Weak outlook for the first quarter
Since the EU narrowly avoided a technical recession in the second half of 2023, the EU Commission continues to see the prospects for the EU economy in the first quarter of 2024 as weak. However, it expects economic activity to gradually accelerate this year. Falling inflation and a resilient labor market should support a recovery in consumption. Slowly easing credit conditions should boost investment.
Trade with third countries is also expected to normalize after a weak performance last year. However, the Commission sees risks in view of the ongoing geopolitical tensions and the risk of a further expansion of the conflict in the Middle East.
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