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The EU Commission forecasts a sharper fall in inflation and a slower rebound in economic activity across the euro zone in its latest Winter Forecast, published Thursday.
Brussels said headline HICP consumer price inflation would decelerate to 2.7% in 2024 and to 2.2% in 2025 in euro area, compared with a forecast of 3.2% and 2.2% respectively in its autumn 2023 forecast. Lower energy prices and stalling economic activity are the key drivers of the easing in inflation pressures. (MNI INTERVIEW: Beware Temporary Inflation Dip- ECB's Kazaks)
The Commission also downgraded its forecast for 2024 euro zone growth to 0.8% from 1.2% in the autumn forecast and to 1.5% from 1.6% in 2025. Officials said that in the near term the expiry of EU governments’ energy support measures and higher shipping costs following disruptions in the Red Sea would exert some upward price pressures but said this would not derail the decline in inflation.
Source: European Commission
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.