European Union cuts growth forecast for 2023

The European Union (EU) This Wednesday, it reduced its expectation of growth of the Gross Domestic Product (GDP) for 2023, while revising the increase in its expectation of the inflation for next year.

In its autumn report, the European Comission (the executive arm of the EU) noted that GDP growth in the euro zone in 2023 will be 0.6%, 0.2% less than its forecast published in the summer.

Simultaneously, the Commission readjusted upwards its inflation outlook for next year, in relation to the summer forecasts.

The report of this entity indicated that inflation for the eurozone in 2023 it would be 3.2%, 0.3 percentage point above the forecasts released in the European summer.

Inflation “maintains its downward trend,” the document indicated, although it raised the projection from an initial estimate of 2.9% to 3.2%.

For the current year, the Commission maintained its forecast of inflation of 5.6%.

In relation to the inflation profile, the entity stated that the moderation registered in 2022 had been due to a fall in prices energy.

Nevertheless, “now has a broader base across major consumer categories, beyond energy and food”he noted in the report.

The Commission maintained that the European economy “has lost its momentum this year, in a scenario marked by a high cost of living, fragile external demand and the tightening of the monetary politics”.

after one “robust expansion in most of 2022, GDP contracted through the end of the year and barely grew in the first three quarters of 2022”the document indicated.