EU forecasts gradual expansion amid high geopolitical risks in latest economic forecast
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The European Commission predicts that the European Union’s economy will see slow but increasing economic growth this year and next year, according to a new forecast published on Wednesday.
The commission said that growth in early 2024 “marks the end of the prolonged period of economic stagnation that started in the final quarter of 2022”.
The European Commission’s Spring Forecast is projecting a slightly improved growth for this year, at 1.0% in the EU and 0.8% in the euro area. This is a slight uptick from the Winter 2024 interim Forecast for the EU, but unchanged for the euro area. Almost all Member States are expected to return to growth in 2024.
With economic expansion in the southern rim of the EU still outpacing growth in north and western Europe, economic convergence within the EU is set to progress further. On the 20th anniversary of the enlargement of the EU towards the east and the south, it is notable that, after almost stalling last year, economic convergence is also set to resume for the newer Member States. It is expected to continue at a sustained pace throughout the forecast horizon and beyond.
Inflation is projected to continue declining over the forecast horizon. In the EU, it is now expected to decrease from 6.4% in 2023 to 2.7% in 2024 and 2.2% in 2025. In the euro area, it is forecast to fall from 5.4% in 2023 to 2.5% in 2024 and 2.1% in 2025. This is a downward revision compared to winter for both the EU and the euro area – especially for this year.
