EU Commission lowers Eurozone GDP forecast amid recession risks
In its quarterly assessment published on Monday, the European Commission downgraded its projections for the Eurozone’s economic growth for this year and the next, citing that the German economy has slipped into recession.
Additional takeaways
Sees Eurozone GDP growth at 0.8% in 2023, 1.3% in 2024, down from 1.1% and 1.6% respectively seen in May.
Expects German economy to shrink by 0.4% in 2023 against its May forecast of 0.2% growth, sees German 2024 growth at 1.1% vs. 1.4% forecast in May.
Expects France to grow 1.0% in 2023, faster than the 0.7% it forecast in May.
Expects Italy to grow 0.9% this year vs. 1.2% forecast in May.
Slashes Dutch growth forecast to 0.5% this year from 1.8% see in May, expects 1.0% in 2024 vs. 1.2% expected in May.
Sees Eurozone inflation at 5.6% in 2023 vs 5.8% forecast in May, expects 2.9% Eurozone inflation in 2024 vs. 2.8% forecast in May.
Market reaction
The quarterly forecasts fail to have any notable impact on the Euro, as EUR/USD continues to trade sideways around 1.0725, up 0.24% on the day.