The gross domestic product (GDP) of the European Union is anticipated to grow by 0.9 percent this year, with EU countries that utilize the euro projected to experience a similar increase of 0.8 percent. Looking to the future, economic activity in the EU is forecasted to increase by 1.5 percent in 2025, followed by a further rise of 1.6 percent in 2026.
Inflation rates in the eurozone are projected to see a considerable decline in 2024, falling from 5.4 percent the previous year to 2.4 percent. Although inflation is expected to continue decreasing in the subsequent year, the rate of decrease will diminish, with the Commission estimating rates of 2.1 percent in 2025 and 1.9 percent in 2026. The aim is to keep inflation capped at a maximum of 2 percent.
Job growth is increasing, albeit at a slower pace. In 2024, employment within the EU is predicted to rise by 0.8 percent, with an anticipated increase of 0.5 percent in 2025.
Despite the seemingly optimistic outlook, the European Commission highlights several major risks, such as the persistent conflict in Ukraine and worsening tensions in the Middle East. These issues threaten energy supplies, which could lead to higher prices for consumers. Furthermore, protectionist measures from countries outside the EU could negatively impact the European economy.
(November 15, 2024)
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