Eurozone Growth Outlook Still Hampered by Inflation

Eurozone Growth Outlook Still Hampered by Inflation
The European Commission this week tempered its eurozone growth expectations for 2023 and 2024, saying the high cost of living and interest rates were dragging down consumers and businesses.
It adjusted its 2023 growth forecast to 0.6%, removing 0.2 percentage points from a prior estimate. Growth in 2024 is expected to be 1.2%, a 0.1-point drop.
Still high, though declining, inflation and tightening monetary policy took a heavier toll than previously expected. External demand was also weak, according to the commission.
The eurozone's economic expectations contrasted with that of the United States, which is enjoying strong annualized growth of 4.9% based on third-quarter data.
Both Europe and the United States are fighting with stubbornly high inflation, set off by the post-pandemic increase in demand and, in Europe's case, complicated by higher energy costs resulting from Russia's war in Ukraine.
Brussels anticipates 5.6% inflation for the eurozone this year, unchanged from a previous estimate, and 3.2% next year, an increase from the 2.9% previously forecast.
What does this mean for me?
Europe's economic slowdown has leaked through to the services sector after bringing industry activity down, and the outlook is dampened by softer demand and shortages of material and equipment.
The eurozone's biggest economy, Germany, is expected to shrink by 0.3% this year before seeing a "moderate rebound" to 0.8% growth next year and 1.2% in 2025, the commission said.
France, the second-biggest economy, is expected to post 1% growth this year, 1.2% next year and 1.4% in 2025.
Risk Disclosure: Trading in financial instruments involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Arincen would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Arincen and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Arincen and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website. Arincen may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.