The Autumn 2023 economic forecast has been released by the European Commission, anticipating a gradual economic recovery and a continued decrease in inflation. The EU economy is experiencing a slowdown, attributed to factors such as the high cost of living and increased interest rates.
The forecast indicates an anticipated rebound in growth, with GDP growth expected to improve in 2024, reaching 1.3% in the EU and 1.2% in the euro area. In terms of consumer impact, inflation in the euro area is on a downward trajectory, hitting its lowest point in two years at 2.9% in October, down from the peak of 10.6% a year ago. This trend is expected to persist into 2024, mitigating the rise in prices for food, manufactured goods, and services.
The labor market is generally robust, reflecting a significant employment rate. The EU’s unemployment rate is projected to remain relatively stable at 6.0% in both 2023 and 2024.However, increasing interest rates contribute to greater borrowing costs, resulting in fewer people planning to buy homes. Regardless of these obstacles, a combination of lower inflation, increased earnings, and an increase in exports is likely to contribute to a modest economic recovery.
Notably, this Autumn economic forecast includes Bosnia and Herzegovina, Moldova, and Ukraine for the first time, following the European Council’s granting of EU candidate status to these countries last year.