The European Commission’s Autumn 2023 economic forecast is predicting a continued decline in inflation and modest gains in growth, while the labour market is expected to remain stable into 2024. 

It has been an unsettling year on the economic front for people in the European Union, with high inflation taking bigger and bigger chunks out of earnings and spending power, and high interest rates causing alarm in the real estate and other sectors.  

But there could be reason for hope – in moderation – if the latest economic forecast from the European Commission (EC) is anything to go by.  

IMPROVEMENTS 

According to the EC, a rebound in growth is anticipated in general, with gross domestic product (GDP) growth expected to improve by 1.3% in the EU and 1.2% in the euro zone.  

Inflation dropped to its lowest in two years this past October, to 2.9%. Against its peak of 10.6% a year ago, this fall is significant and suggests that the prices of food, manufactured goods and services should not be increasing as drastically as seen in recent times.

Inflation is “set to continue this downward trend in 2024”, says the EC.  

The labour market is looking good. Unemployment sits at a relatively stable 6% and is expected to remain at this level in 2024. Despite employment levels being strong, however, high interest rates have made borrowing unrealistic for many, thus slowing the housing market and the overall economy.  

FRANCE 

In France, the picture looks much like the global EU forecast. Inflation currently remains high, but is predicted to drop from 5.8% to 3% next year. Current financial conditions in France, as in the EU, are making growth sluggish. 

In 2024, France’s GDP growth is anticipated to rise from 1% in 2023 to 1.2% in 2024.   

Unemployment is expected to rise slightly from 7.2% to 7.4%, higher than the EU average, but still is an unalarming figure, especially considering employment hit record highs of 68.6% in the second quarter of 2023.  

The public deficit, which is about 4.8% of GDP in 2023, is predicted to fall to 4.4% next year. This will be spurred on by the withdrawal of energy-related measures taken at the height of the energy crisis.  

Public debt declined to 109.6% of GDP in 2023, and to is set to pick up again to 110% in 2025, with 2024 looking stable, also due to the still high primary deficit.  

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Photo source: Aron Skaya, Unsplash