The European Commission – the European Union’s executive branch – has downgraded its economic forecast for the Eurozone, saying inflation is still too high, consumer spending is down and Germany, the continent’s largest economy, is in recession.
At a news conference in Brussels Monday, EU Economy Commissioner Paolo Gentiloni said they are now predicting the gross domestic product (GDP) of the 27-nation EU will expand at eight-tenths of one percent for 2023, and at 1.3 percent in 2024.
Those numbers are down from the May projections of 1.1 and 1.6 percent, respectively.
Gentiloni said Germany’s GDP was significantly weaker than expected in the first half of this year, with declining wages driving down consumer spending, and lower external demand leading to subdued exports.
He said the German economy is now projected to shrink by 0.4 percent in 2023, “a significant downward revision” from a May prediction of 0.2 percent growth.
He said they are forecasting that Italy’s and the Netherlands’ economies will also grow more slowly this year, with GDP expansion of 0.9 percent and 0.5 respectively, down from earlier projections of 1.2 percent and 1.8 percent.
But the commission said the economies of France and Spain will grow faster than previously expected this year, projecting 1.0 percent and 2.2 percent growth respectively, instead of the previously seen 0.7 percent and 1.9 percent.
Some information for this report was provided by the Associated Press, Reuters and Agence France-Presse.