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Inflation forecast to drop further and EU economy to show modest upturn
21.11.2023 13:07 "Agro Perspectiva" (Kyiv) —
The European Commission has published its Autumn 2023 economic forecast. It predicts that economic activity will gradually recover and inflation will continue to go down. This is set against a slowdown in the EU economy, due to the high cost of living and increased interest rates, among other factors. Overall, a rebound in growth is expected, with GDP growth forecast to improve in 2024 — to 1.3% in the EU and 1.2% in the euro area. For consumers, inflation in the euro area is going in the right direction, declining to its lowest level in two years, to 2.9% in October, from its 10.6% peak a year ago. It is set to continue this downward trend in 2024. This will mean prices for food, manufactured goods and services will not rise as much. The labour market is generally performing well, with many people in jobs. The unemployment rate in the EU is expected to remain broadly stable at 6.0% in 2023 and in 2024. Higher interest rates are making borrowing more expensive, however, with fewer people planning to buy a house. With lower inflation, higher incomes, and a pick-up in exports, the economy should recover, albeit modestly. This Autumn economic forecast for the first time covers Bosnia and Herzegovina, Moldova and Ukraine, to which the European Council granted EU candidate status last year.
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