The European Commission released on Monday its spring economic outlook, putting annual inflation in the euro area at 5.8% in 2023, compared to 5.6% in the previous forecast. In 2024, inflation is expected to stand at 2.8%, up from 2.5%. Annual core inflation in the euro area in 2023 is set to average 6.1%, before falling to 3.2% in 2024.
The growth expectations have also been lifted, with the Eurozone expected to see GDP growth of 1.1% in 2023 and 1.6% in 2024, up from 0.9% and 1.5% respectively in the winter forecast. Employment growth in the EU is seen at 0.5% in 2023 and 0.4% in 2024, with the unemployment rate at 6.2% and 6.1% respectively. The report pointed out that downside risks to the economic outlook have increased, including the possibility of more persistent core inflation, continued financial sector stress, expansionary fiscal policy, and geopolitical tensions.
