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鈥檚 Spring Economic Forecast, the EU鈥檚 gross domestic product is set to grow by 1% this year and by 1.7 % in 2024.
The report said 鈥渓ower energy prices lift the growth outlook鈥� and corrected the GDP expectations from 0.8% to 1% compared to its winter edition.
鈥淢arkedly lower energy prices are working their way through the economy, reducing firms鈥� production costs鈥� while 鈥渃onsumers are also seeing their energy bills fall,鈥� the EU executive body asserted in a statement.
However, 鈥渋nflation remains high鈥� 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 鈥� the price of goods and services excluding energy and food 鈥� explained it after it reached a historic high of 7.6% in March.
The population鈥檚 energy consumption 鈥渋s set to remain subdued as wage growth lags inflation鈥� and 鈥渇inancing conditions are set to tighten further,鈥� the European Commission said.
By Agnes Szucs in Brussels
Anadolu Agency
energy@aa.com.tr