The European Commission forecasts a modest economic recovery in the eurozone in 2025

The European Commission forecast this Friday that the eurozone economy will register modest growth of 0.8% this year, and 1.3% in 2025, with inflation trending downward.

In its report on economic forecasts for autumn, the Commission predicts that inflation will close at 2.4% this year and maintain a downward trend in 2025, ending at 2.1%, and reaching 1.9% in 2026.

The modest improvement in the first quarter of this year “opens the way for a modest pick-up in economic activity, while the disinflation process continues,” the commission said in its report.

Presenting these figures, European Economy Commissioner Paolo Gentiloni said that “after the stagnation of 2023, the EU economy is growing again and will accelerate over the next two years.”

“After returning to growth in the first quarter of 2024, the EU economy maintained its expansion in the second and third quarters, albeit at a steady but still modest pace,” the senior Italian official said.

However, he added that “growth remains modest and faces significant downside risks.”

According to Gentiloni, the recovery of the eurozone economy is driven by domestic demand.

The Commissioner said that in the first quarter of 2024, domestic consumption grew modestly, in the second quarter it was above expectations and in the third it finally strengthened.

– Development in Spain –

Among the eurozone’s main economies, the Commission forecast Germany to register a contraction of 0.1% this year and growth of 0.7% in 2025, while France will register growth of 1.1% this year and 0.8% in 2025.

Meanwhile, Spain should post strong growth of 3% this year, which will moderate to 2.3% next year.

In the specific case of Spain, Gentiloni said he had no problem with the country directing EU resources towards the reconstruction of the Valencia region, which was devastated by the cold snap, killing more than 210 people and There was much physical damage.

“Obviously, this tragedy will have short-term consequences,” he said.

“From our point of view, of course, this type of expense is a one-time expense, so we do not account for it in the procedures. (…) It is normal for the Commission to cooperate with the Spanish authorities,” he said.

The European Commission report also mentions the possibility of increased economic protectionism measures among “trading partners”, although it does not mention the election of Donald Trump to the White House.

Gentiloni assured that the EU will engage with the new US government “with a great spirit of cooperation, but also with the idea that we have to protect our strength as an economy open to trade.”

“We should not underestimate the role that trade flows play in the stabilization of the international community and also the risk of trade friction between the US and the EU. “I think we’ve managed to manage these frictions over the last five years,” he said.

AHG/ES