General statisticsEuropean Economic Forecast Autumn 2023

The European economy has lost momentum this year against the background of a high cost of living, weak external demand and monetary tightening.

While economic activity is expected to gradually recover going forward, EU GDP growth slows down compared to its summer projections. Inflation is estimated to have dropped to a two-year low in the euro area in October and is set to continue declining over the forecast horizon.

Key facts:

• EU GDP growth is forecast to improve to 1.3% in 2024, still below potential and a downward revision of 0.1 pps. from summer. It is projected to gain further pace, to 1.7%, in 2025
• Total investment spending is set to grow steadily over the forecast horizon.
• Increasing wages, continued employment growth and further slowing of inflation are expected to lift the purchasing power of households in 2024 and 2025, boosting consumption.
• The coexistence of low unemployment and high shares of vacancies and labour shortages points to a still tight labour market.
• HICP inflation has continued declining sharply from the peak of 10.6% year-on-year recorded in October 2022 in the euro area. In October this year, it is estimated to have reached a two-year low of 2.9%. Inflation in the EU has followed a similar path.

Links:

Autumn 2023 Economic Forecast: A modest recovery ahead after a challenging year

Source: European Commission