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"2023, the most challenging year"/ Economy in 'place number', European Commission lowers GDP growth
Written by SOT.COM.AL 15 Nëntor 2023
As the most challenging year comes to an end, the European economy has lost its momentum. The European Commission's fall forecast lowered GDP growth compared to summer forecasts.
Now, Brussels estimates that GDP growth this year will be at the level of 0.6% both in the whole EU and in the Eurozone, 0.2% less than forecasts.
The reasons are the high cost of living, the fall in external demand and monetary constraints. But the Commissioner for Economy, Paolo Gentiloni, hopes for a better future, especially for family members.
"In the next two years, private consumption will lead growth, while rising wages will reduce inflation, raising the purchasing power of consumers. A strengthening labor market is also likely to contribute. The recovery of private consumption may be even stronger in the absence of high savings, which is expected to last," said Paolo Gentiloni, EU Commissioner for the Economy.
The forecast does contain good news on the inflation front, however. Consumer prices followed the downward trend. In October they fell to 2.9 percent in the euro zone, the lowest level in the last two years.
A year ago, inflation peaked at over 10 percent. While its decline came as a result of the drop in energy prices, now it comes as a result of the drop in prices in all categories of consumption. But what are the main obstacles to growth during 2024?
"Those countries that are very energy dependent, or have been dependent on Russia and now have an economy that is more energy intensive, are the ones that will bear the biggest costs. And here I am talking about Germany. Germany is the engine of the EU and if its economy does not grow, then the rest of Europe will feel its impact," said the economic expert, Maria Demertzis.
The autumn economic forecast for the first time also included Bosnia and Herzegovina, Moldova and Ukraine, which received EU candidate status last year. All three countries are showing encouraging figures, especially Ukraine, whose economy has shown stability during 2023.