The European Union Has Again Cut Its Economic Growth Forecast For This Year And Next

On November 15, the European Commission released its Autumn 2023 Economic Outlook report, lowering the economic growth forecast for the EU and the eurozone this year and next. The report noted that the European economy has lost momentum this year amid high living costs, weak external demand and monetary tightening. The report forecasts GDP growth of 0.6% for both the EU and the euro area in 2023, both 0.2 percentage points lower than predicted in the Summer Economic Outlook report, and forecasts growth of 1.3% for the EU and 1.2% for the euro area in 2024, both 0.1 percentage points lower than previously expected. In its Summer 2023 Economic Outlook report published on September 11, the European Commission lowered its 2023 economic growth forecast for the EU to 0.8% from the 1.0% forecast in the Spring Outlook report, and the 2023 economic growth forecast for the euro area to 0.8% from 1.1%. The latest report noted that high inflation and tighter monetary policy, combined with weak external demand, were taking a bigger toll on the economy than previously thought. The latest business indicators and survey data suggest that European economic activity will continue to slow in the fourth quarter of this year due to increased uncertainty. European Commissioner for Economic Affairs Paolo Gentiloni said inflationary pressures, tighter monetary policy and weak global demand were taking their toll on households and businesses. In addition, heightened geopolitical tensions are further adding to uncertainty and clouding the economic outlook. This year's Autumn Economic Outlook covers Bosnia and Herzegovina, Moldova and Ukraine for the first time. The three countries were granted candidate membership status by the European Council last year.