European Economic Forecast. Winter 2023

Summary:

The European Commission published on 14 February 2023 its Winter economic forecast for the European Union (EU) and the Eurozone.

Further information:

Almost one year after Russia launched its war of aggression against Ukraine, the EU economy entered 2023 on a better footing than previously projected and is now set to narrowly avoid the recession that was anticipated for the turn of the year. As a result, the Winter interim Forecast lifts the growth outlook for this year and slightly lowers the projections for inflation for both 2023 and 2024.

This Winter interim Forecast lifts the outlook for growth and slightly lowers the inflation projections. Growth for 2022 is now estimated at 3.5% in both the EU and the euro area. GDP is projected to expand by 0.8% in 2023 and 1.6% in 2024 (0.9% and 1.5% in the euro area). Headline inflation is forecast to fall from 9.2% in 2022 to 6.4% in 2023 and 2.8% in 2024 in the EU. In the euro area, it is projected to decelerate from 8.4% in 2022 to 5.6% in 2023 and to 2.5% in 2024.

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Official

European Commission: Economic Forecasts: Winter 2023 Economic Forecast: EU Economy set to avoid recession, but headwinds persist https://economy-finance.ec.europa.eu/economic-forecast-and-surveys/economic-forecasts/winter-2023-economic-forecast-eu-economy-set-avoid-recession-headwinds-persist_en

European Commission: Press Release, 13/02/2023: Winter 2023 Economic Forecast: EU economy set to avoid recession, but headwinds persist https://ec.europa.eu/commission/presscorner/detail/en/ip_23_707

European Commission: Remarks by Commissioner Gentiloni at the press conference on the Winter 2023 Economic Forecast (13 February 2023) https://ec.europa.eu/commission/presscorner/detail/en/speech_23_824

Deutsche Welle, 13/02/2023: EU economic forecasts: Inflation past its peak, no recession https://p.dw.com/p/4NOsH

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News

Euronews, 13/02/2023: EU economy to 'narrowly' avoid a recession as inflation peak passes, Brussels projects https://www.euronews.com/my-europe/2023/02/13/eu-economy-to-narrowly-avoid-a-recession-as-inflation-peak-passes-brussels-projects

The Guardian, 13/02/2023: EU tipped to avoid recession after gas crisis eases https://www.theguardian.com/world/2023/feb/13/eu-tipped-to-avoid-recession-after-gas-crisis-eases-cost-of-living

Bloomberg, 13/02/2023: EU Deficits Must Come Down as Economy Improves, Dombrovskis Says https://www.bloomberg.com/news/articles/2023-02-13/eu-deficits-must-come-down-as-economy-improves-dombrovskis-says

Independent (UK), 13/02/2023: EU foresees economy improving, but inflation still painful https://www.independent.co.uk/news/europe-ap-frankfurt-germany-european-commission-b2281078.html

CityAM, 13/02/2023: Ireland to keep European economy out of a recession as Britain gets left behind https://www.cityam.com/ireland-to-keep-european-economy-out-of-a-recession-as-britain-gets-left-behind/

Reuters, 13/02/2023: German economy expected to grow modestly in 2023 - European Commission https://www.reuters.com/markets/europe/german-economy-expected-grow-modestly-2023-european-commission-2023-02-13/

Politico, 13/02/2023: EU dodges recession thanks to boost from governments https://www.politico.eu/article/eu-economy-avoid-recession-inflation-boost-government/

RFI News, 13/02/2023: European Union increases growth forecast as eurozone dodges recession https://www.rfi.fr/en/europe/20230213-european-union-increases-growth-forecast-as-eurozone-dodges-recession

The Irish Times, 13/02/2023: Irish economic growth helps EU narrowly avoid recession https://www.irishtimes.com/business/2023/02/13/eu-avoids-recession-as-forecasts-revised-up/

RTÉ News, 13/02/2023: European Commission raises Irish, euro zone growth forecasts https://www.rte.ie/news/business/2023/0213/1356293-euro-zone-growth-forecasts/

Malta Today, 13/01/2023: Brussels forecasts 3.1% economic growth for Malta, second-highest in EU https://www.maltatoday.com.mt/news/national/121260/brussels_forecasts_31_economic_growth_for_malta_secondhighest_in_eu#.Y-tgAMfP2Uk

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Commentary and Analysis

Centre for Economic Policy Research (CEPR): VoxEU Columns, 14/02/2023: EU economy set to escape recession, but headwinds persist: The Commission's Winter 2023 Economic Forecast https://cepr.org/voxeu/columns/eu-economy-set-escape-recession-headwinds-persist-commissions-winter-2023-economic

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