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EC Sees Weaker Growth & Higher CPI than ECB Sep Forecast

EUROPEAN DATA
MNI (London)

Weak global demand and surging inflationary pressures emanating from the Ukraine war has led to substantially weakened EU growth outlooks in the European Commission's Autumn forecast.

  • 2022 growth is anticipated to be stronger than initially expected, after H1 2022 GDP surprised to the upside, underpinned by strong consumer spending. This should lift real GP growth for 2022 to 3.3% (3.2% in EZ) (up from 2.7% in Summer).
  • 2023 outlooks have worsened. GDP is expected to see weak growth of 0.3% in the EU and EZ in 2023 (below 0.9% projected by the ECB), regaining some momentum at 1.6% (EU) and 1.5% (EZ) in 2024.
  • Inflation forecasts have been upgraded substantially from the Summer projections, by approx. 1pp to 2022 and 2pp to 2023 largely due to energy costs. At 9.3% in 2022 and 7.0% in 2023, this markedly higher than the ECB's September projections of 8.1% (2022) and 5.5%% (2023).
  • The labour market is largely anticipated to remain resilient, yet employment growth is to come to a standstill in 2023 as weak economic conditions see hiring plateau.
  • Below is a summary of the key projections from the report:

Keep reading...Show less
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Weak global demand and surging inflationary pressures emanating from the Ukraine war has led to substantially weakened EU growth outlooks in the European Commission's Autumn forecast.

  • 2022 growth is anticipated to be stronger than initially expected, after H1 2022 GDP surprised to the upside, underpinned by strong consumer spending. This should lift real GP growth for 2022 to 3.3% (3.2% in EZ) (up from 2.7% in Summer).
  • 2023 outlooks have worsened. GDP is expected to see weak growth of 0.3% in the EU and EZ in 2023 (below 0.9% projected by the ECB), regaining some momentum at 1.6% (EU) and 1.5% (EZ) in 2024.
  • Inflation forecasts have been upgraded substantially from the Summer projections, by approx. 1pp to 2022 and 2pp to 2023 largely due to energy costs. At 9.3% in 2022 and 7.0% in 2023, this markedly higher than the ECB's September projections of 8.1% (2022) and 5.5%% (2023).
  • The labour market is largely anticipated to remain resilient, yet employment growth is to come to a standstill in 2023 as weak economic conditions see hiring plateau.
  • Below is a summary of the key projections from the report:

Keep reading...Show less