Recession looming ahead for most EU countries: EU Commission
According to a report published by the EU Commission, forecasts for GDP growth in the EU and the Eurozone were lowered to 0.3%.
According to an economic report published on Friday on the EU Commission's website, the EU stated most of its member states are heading into recession in the last quarter of the year 2022.
The report titled 'Autumn 2022 Economic Forecast: The EU economy at a turning point' states that "high energy price pressures, erosion of households' purchasing power, a weaker external environment, and tighter financing conditions are expected to tip the EU, the euro area and most Member States into recession in the last quarter of the year."
In the report, it is further stated that forecasts for GDP growth in the EU and the Eurozone were lowered to 0.3%.
"As inflation keeps cutting into households' disposable incomes, the contraction of economic activity is set to continue in the first quarter of 2023. Growth is expected to return to Europe in spring, as inflation gradually relaxes its grip on the economy. However, with powerful headwinds still holding back demand, economic activity is set to be subdued, with GDP growth reaching 0.3% in 2023 as a whole in both the EU and the euro area," the commission report read.
The forecast further states that in 2024, GDP growth will progressively recuperate at 1.6% in the EU and 1.5% in the eurozone.
Autumn 2022 Economic Forecast (by the European Commission) :— DTT-NET English (@dtt_net_english) November 11, 2022
The #EU economy at a turning pointhttps://t.co/0JxlrCEQ1h pic.twitter.com/oiQ8BSquVO
According to the report, the forecast for the annual inflation in the EU was raised from the previous 8.3% to 9.3%.
"Higher-than-expected inflation readings throughout the first ten months of 2022 and broadening price pressures are expected to have moved the inflation peak to year-end and to have lifted the yearly inflation rate projection to 9.3% in the EU and 8.5% in the euro area," the report read.
The annual forecast for the 2023 annual inflation was increased by the Commission from 4.6% to 7.0% in July.
As for the labor market in the EU, it is expected to remain resilient, adding that "employment growth in the EU is forecast at 1.8% in 2022, before coming to a standstill in 2023 and moderately edging up to 0.4% in 2024."
In the meantime, unemployment rates in the EU are projected at 6.2% in 2022, 6.5% in 2023, and 6.4% in 2024.
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