sef, CNBC Indonesia
Thursday, 02/15/2024 21:40 IWST
Jakarta, CNBC Indonesia – The European Union (EU) is not doing well. The European Commission even cut its growth and inflation forecast for the euro zone in 2024, Thursday (15/2/2024).
Even though inflation is predicted to fall by 2.7%, growth will be slow. It is believed that the region with a single currency will only grow 0.8%.
Geopolitical tensions are the cause. This increases uncertainty for the economy.
It is believed that the central bank, ECB, will cut interest rates due to the weakening economy and slowing consumer prices. Even though currently, the ECB is keeping interest rates stable.
“After successfully avoiding a technical recession in the second half of last year, the outlook for the EU economy in the first quarter of 2024 remains weak,” EU economic commissioner Paolo Gentiloni told journalists in Brussels, quoted AFP.
He said Europe had poor performance compared to other countries in the world. For example, economic growth in the United States (US) in the full year increased to 2.5% last year.
“US consumers have benefited from greater pandemic stimulus than in Europe, adding that the bloc has also been hit harder by the impact of the war in Ukraine on energy prices,” he added.
“The EU performed worse than the US in 2023 and will do the same again this year,” he said, noting that surprises in China’s economic growth and higher interest rate policies in the US could worsen global financial conditions.
The region has also been weighed down by the region’s largest economy, Germany. German economic growth, predicted at just 0.3% in 2024, is down from an autumn forecast of 0.8%.
“Private consumption is suffering from a loss of purchasing power. Activity in the construction and energy-intensive sectors is hampered by high cost increases and labor shortages,” Gentiloni said, despite estimating the economy will grow by 1.2% in 2025.
France, the country with the second largest economy in the EU, is believed to have better performance than Germany. But the commission also cut its French growth forecast to 0.9% from 1.2%.
In 2025, the French economy will only grow 1.3%. This is down from the 1.4% growth forecast previously.
Overall Brussels estimates growth will reach 1.5% next year. It cited a strong labor market, easing inflation, rising wages and an expected gradual easing of credit conditions, as factors that might support growth.
Watch the video below:
Video: European Union Urges US to Stop Supplying Arms to Israel
(sef/sef)
2024-02-15 14:40:00
#latest #data #Europe #fine #read
