What Will Spring 2023 Bring to Europe? – Economic Forecast
The Eurozone economy has been facing challenges over the last few months due to various factors, including the still-high core inflation, banking sector jitters, and slowing growth. However, recent developments have supported the Eurozone economy over the last three months.
For instance, energy prices declined significantly, reducing production costs for businesses and improving profit margins. The labor market has also strengthened and supported economic growth in the euro area. In the first quarter of 2023, supply constraints have also abated, allowing businesses to operate more efficiently.
How Much Economic Growth Do The Analysts Expect?
Some economists stated that core inflation might decrease in spring 2023, leading to an increase in consumer spending. The prices of goods and services will likely stabilize further. This, in turn, will reduce the pressure on consumers’ wallets, allowing them to spend more.
Additionally, the possibility of energy prices remaining low is also a positive factor for consumers. It can significantly reduce the cost of living and increase disposable income. These benefits can further boost consumer spending, driving economic growth in the Eurozone this spring.
However, core price pressures are still weighing on the economy, and that might hinder growth. Furthermore, inflation will likely stay relatively high in 2023. But economists predict that it will decline significantly in 2024 in the Eurozone.
According to recent polls, the year-on-year forecast for Europe’s economic growth in 2023 is 1.0%, which is higher than the figure reported in winter (0.8%). Moreover, analysts forecasted the economy to grow by 1.7% in 2024, a higher figure than the winter forecast (1.6%). Besides, gross domestic product might soar by 1.1% this year and 1.6% in 2024, as well.
Overall, the forecast for the eurozone’s economic growth is positive for the Spring 2023. Still, some analysts warn about possible dangers if the inflation persists. And don’t forget about the recent banking sector jitters that originated from the US. If the world’s largest economy faces more problems in that field, it might affect the eurozone, as well.
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