BRUSSELS – ANSWER. Her clouds recession and his inflation they cover it European economyhow the EU lowered its growth target for 2023 in its autumn outlook released yesterday.

More precisely, her predictions. Commission they forecast growth of 3.3% in 2022 from 2.7% and 0.3% in 2023 – well below the previously forecast 1.5% – with the economy shrinking in the first quarter. Growth prospects are projected to increase to 1.6% in 2024. Similar forecasts for the development of the eurozone. The biggest cut at EU level Germany and Sweden are expected to mark it in 2023.

At the same time, inflation will continue to weigh on the EU, which during this period faced a double-digit rate in October (10.7%). The Commission forecasts that price growth will reach 8.5% this year, while inflation will remain high at 6.1% in 2023 – rates well above the July forecasts.

“The EU economy is at a turning point and its outlook has deteriorated significantly,” Economic Commissioner Paolo Gentiloni said at a press conference on the autumn forecasts. “Inflation continues to grow faster than expected, but we believe that the peak is close,” he added.

In addition, consumption is also expected to suffer in 2023. As the energy crisis and inflation reduce household real disposable income, it is projected to fall from 3.7% in 2022 to 0.1% in 2023. In terms of investment at the European level, it is expected to slow significantly from 2022 to 0.5% in 2023. However, as the recession is projected to be short-lived, no significant erosion of investment capital is expected.

The largest reductions are expected to occur in Germany and Sweden.

In terms of government deficits, low growth and rising interest rates are exacerbating, but overall debt reduction is expected to remain robust in the EU.

The Commission’s forecasts are based on variables that could change as the war in Ukraine continues to rage and potential power outages cannot be ruled out.

“The economic outlook is not only subject to enormous uncertainty, but also critically dependent on politics,” said Commissioner Gentiloni. “If we can show, including through the experience of the pandemic, that we can agree on a common policy strategy, this will have an impact on market and investor confidence and could change the outlook for the better,” he concluded.

According to the Commission’s current analysis, the biggest threats are possible adverse developments in the natural gas market and the risk of shortages, especially in winter. The Commission’s report also assesses fiscal policy to protect vulnerable households and businesses from excessive energy price increases. At the same time, it is noted that E.E. remains exposed to potential financial market volatility, especially as the pandemic and climate change impacts constantly threaten the European and global economies.

Despite the overall negative picture, there is optimism that, while contractionary forces will prevail in the short term, a deep recession in the EU could lead to a sharp downturn. seems unlikely. The dynamics of the first half of the year will be an important deterrent to an impending recession. As the Commission explains in its report, the structural strengths and adaptability demonstrated so far must be used to ensure that the EU is able to meet the new challenges it faces.

gas ceiling

The European Commission responded yesterday, after weeks of peremptory pressure from member states, with an explicit commitment to submit a legislative proposal to limit natural gas supplies before the extraordinary meeting of energy ministers on 24 November. The letter, signed jointly by the Czech Republic, which chairs the Council, and the Chair of the Commission, Ursula von der Leyen, states that “The Commission will, in due course, submit a detailed draft proposal for a corrective mechanism (‘temporary ceiling on natural gas prices’), which will take into account conditions and guarantees requested by Member States”. The Commission’s withdrawal came after a meeting of permanent representatives in Brussels, at which many member states pressed for a legislative proposal for the hundredth time. In addition, the joint letter addresses, in particular, items that the Commission has highlighted as being of paramount importance for preventing supply shocks, such as consumption cuts and common natural gas markets.