EU growth forecast downgraded amid economic uncertainties

European Commission faces slower-than-expected eurozone growth this year due to a decline in purchasing power

The Eurozone economy is poised to experience slower-than-expected growth this year due to a decline in purchasing power caused by rising prices and credit constraints resulting from elevated interest rates, the European Commission said on Thursday.

The European Commission, in its latest forecast, projects a growth rate of 0.8% for the single-currency economic area in 2024, marking a significant reduction from the previous estimate of 1.2%. This downward revision comes as the eurozone grapples with challenges that have dampened the economic landscape.

“After narrowly avoiding a technical recession in the second half of last year, prospects for the EU economy in the first quarter of 2024 remain weak,” stated the commission. The subdued economic performance in recent months has prompted concerns about the recovery’s durability and raised questions about the factors influencing the region’s growth trajectory.

One of the key factors contributing to the revised forecast is the slower-than-expected rebound in several eurozone economies. While some countries showed resilience in the face of ongoing challenges, others experienced setbacks that weighed on overall performance. 

The commission highlighted the need for coordinated efforts to address these disparities and foster a more balanced and inclusive recovery.

Source: AFP

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