The combined GDP of the European Union member countries is expected to rise by about 0.8 percent this year. Earlier projections had suggested a more modest uptick, around 0.3 percent, before the European Commission published its updated assessment.
In a statement accompanying the EC’s winter interim forecast, the EU economy is acknowledged to have opened 2023 with stronger momentum than previously anticipated in the autumn review. The forecast now points to growth of roughly 0.8 percent for the EU overall and about 0.9 percent for the euro area this year.
Officials across both the EU and the eurozone are intent on steering away from a technical recession in 2023. They see several supportive elements, including a gradual easing of price pressures which the revised EC outlook incorporates as a central assumption. The goal is to sustain expansion while inflation cools in the coming quarters.
According to the commission, headline inflation in the EU is expected to ease from about 9.2 percent in 2022 to around 6.4 percent in 2023 and further down toward 2.8 percent in 2024. For the euro area, growth is projected to slow from 8.4 percent in 2022 to roughly 5.6 percent in 2023 and about 2.5 percent in 2024, reflecting a slower but continuing expansion across the region. These numbers reflect the EC’s careful balance between price stability and growth, aiming to preserve consumer purchasing power while supporting investment and job creation across member states. [Attribution: European Commission forecast]
Meanwhile, a note from Bank of America analysts, dated February, outlines a global growth path for 2023 that places overall world output at around 2.5 percent. The bank explicitly forecasts a stronger trajectory for China, with growth near 5.5 percent, while projecting modest but positive gains for the EU at about 0.4 percent for the current year and approximately 0.9 percent for the following year. This external outlook underscores the cross-border nature of today’s economic dynamics, where policy signals in Europe interact with trends in major economies abroad and influence investment, trade, and financial conditions on both sides of the Atlantic. [Citation: Bank of America forecast]