EU improves economic forecast due to lower energy prices

The EU expects 1% economic growth in 2023 due to lower energy prices but inflation remains high, the European Commission announced on Monday. According to the European Commission's Spring Economic Forecast, the EU's gross domestic product is set to grow by 1% this year and by 1.7 % in 2024. The report said 'lower energy prices lift the growth outlook' and corrected the GDP expectations from 0.8% to 1% compared to its winter edition. 'Markedly lower energy prices are working their way through the economy, reducing firms' production costs' while 'consumers are also seeing their energy bills fall,' the EU executive body asserted in a statement. However, 'inflation remains high' as it is expected to reach 6.7% in 2023, the EU executive body stressed. The new report showed a slightly higher rise in prices than the winter forecast of 6.4%. The increase in core inflation - the price of goods and services excluding energy and food - explained it after it reached a historic high of 7.6% in March. The population's energy consumption 'is set to remain subdued as wage growth lags inflation' and 'financing conditions are set to tighten further,' the European Commission said.

Source: Anadolu Agency