The European Commission today publishes its Interim Winter Macroeconomic Forecast, which is expected to be slightly more optimistic than the November projections, despite uncertainties caused by the ongoing war in Ukraine.
Since the previous winter forecasts, published on February 10, 2022, Brussels has been forced to revise its macroeconomic projections due to successive sharp falls, largely as a result of the war started by Russia in Ukraine on February 24 and the consequent price escalation, particularly in the energy sector.
However, the performance of the European economy in the last quarter of last year was better than expected by most economic institutions and analysts, with the Eurozone even avoiding a contraction that seemed inevitable, recording growth of 0.1 %, and ending 2022 with growth. 3.5% (and the EU as a whole 3.6%), above expectations.
In addition, gas and electricity prices fell back to pre-war levels and inflation eased sharply in December: after reaching a record high of 10.7% in the euro area in October, it fell to 10.1% in November. (the first decline since June). 2021) and 9.2% in December.
“Regarding the economic outlook, we continue to expect a challenging year as the effects of Russia’s war of aggression continue to take their toll on our economy. That said, there have been some encouraging recent developments, which may anticipate a less sharp contraction this winter. than expected at the time of our autumn forecasts,” said European Commissioner for the Economy Paolo Gentiloni last November at the previous Eurogroup meeting last month.
In the autumn forecasts, Brussels sharply revised the growth outlook for the European economy in 2023 downwards, anticipating a significant contraction, with GDP increasing by just 0.3% both in the euro area and as a whole. of the European Union. By 2024, the community executive expected in autumn that the growth of the European economy would accelerate again, up to 1.5% in the euro zone and 1.6% in the EU.
As for inflation -the only other indicator included in these economic forecasts, since they are provisional-, Brussels expects it to reach 6.1% in the euro zone and 7.0% in the EU this year, falling back in 2024 up to 2.6% and 3.0%, respectively, with projections that may also be a little more optimistic.
Regarding Portugal, last November the European Commission anticipated that the Portuguese GDP would grow by only 0.7% in 2023, well below the projections of the Government, which continues to expect growth of 1.3%, although the minister of the Treasury, Fernando Medina, assumed last month that the growth data of the Portuguese economy in 2022 -6.7%, two tenths above the forecast of the Government itself- give “more confidence regarding the progress of the year 2023 “.
Regarding the inflation rate, in autumn the perspective of Brussels was that it would drop in 2023 to 5.8% and next year to 2.3%. The Government is already aiming for an inflation rate of 4% this year, but the Bank of Portugal aligns its forecast with that of the European Commission, also projecting a value of 5.8% this year.
The winter macroeconomic forecasts will be presented today at the headquarters of the community executive by the Commissioner for the Economy, Paolo Gentiloni, starting at 10:00 a.m. local time, 9:00 a.m. Lisbon time, on a day in which Brussels also hosts, in the afternoon , meeting of finance ministers of the euro zone (Eurogroup), in which the minister Fernando Medina will participate.
Source: TSF
