European economy expected to grow faster than forecast, says EU
Europe’s economy is expected to grow faster than previously thought this year and next, despite high inflation and rising interest rates, according to the European Commission.
The commission said the EU’s 27 members would grow at an average of 1% in 2023, up from a previous estimate of 0.8%. It nudged its forecast for growth in 2024 to 1.7% from 1.6%.
The eurozone’s 20 members are expected to grow by 1.1% on average and 1.6% next year.
By comparison, the UK economy is expected to be weaker, with growth of 0.25% expected this year and 0.75% in 2024, according to the Bank of England.
With fears of a recession easing, EU growth so far this year has been stronger than expected when the last growth estimates were made in February, the commission said.
“The EU economy is managing the adjustment to the shocks unleashed by the pandemic and Russia’s aggression of Ukraine remarkably well,” it said in a report.
“Last year, the EU successfully managed to largely wean itself off Russian gas.”
Ireland will lead EU growth league over the next two years as it has done over the past two years.
Dublin is forecast to enjoy a growth rate of 5.5% and 5% in 2023 and 2024, respectively, after chalking up a growth rate of 13.6% in 2021 and 12% in 2022.
France’s growth rate will accelerate from 0.7% in 2023 to 1.7% in 2024 while Germany’s economy, which was hit hardest by sanctions on Russian gas, is expected to expand by 0.2% this year and and 1.4% next year.
Estonia and Sweden are the only EU countries to suffer a contraction this year – Sweden by 0.5% and Estonia by 0.4%, before both make modest recoveries in 2024.
The commission said that overall the forecasts were good news for European households and businesses.
“The European economy has managed to
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