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MNI BRIEF: European Commission Raises Growth Forecast

(MNI) Brussels

The European Commission raised its eurozone growth forecast to 0.9% in 2023, up from 0.3% in its autumn estimates and said a feared technical recession around Q4 2022 and Q1 2023 will now be avoided, thanks to a strong labour market, falling energy prices and improving economic confidence.

Estimated growth in 2024 remains unchanged at 1.5% for the euro area and, by the end of the forecast horizon, the volume of output is forecast to be almost 1% above that projected in autumn.

The Commission forecast easing inflation pressures for 2024 and 2025 following a peak three months ago as wholesale energy prices start to fall on strong storage levels and reductions in energy consumption, but it noted that core inflation has yet to peak. Headline inflation should fall from 8.4% in 2022 to 5.6% in 2023 and to 2.5% in 2024. (See MNI SOURCES: 100bp Gap Between Hawk-Dove ECB Peak Rates)

MNI Brussels Bureau |
MNI Brussels Bureau |

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