Net exports, particularly of multinational corporations, are expected to remain resilient and be the main driver of growth. Inflation is expected to peak at 8.3% this year and to remain high at 6.0% in 2023 before moderating to 2.8% in 2024. The fiscal outlook is benign, with the budget balance posting surpluses throughout the forecast years.
The Autumn 2022 Economic Forecast expects that amid elevated uncertainty, high energy price pressures, erosion of households' purchasing power, a weaker external environment and tighter financing conditions will tip the EU, the euro area and most Member States into recession in the last quarter of the year. Still, the potent momentum from 2021 and strong growth in the first half of the year are set to lift real GDP growth in 2022 as a whole to 3.3% in the EU (3.2% in the euro area) - well above the 2.7% projected in the Summer Interim Forecast.
As inflation keeps cutting into households' disposable incomes, the contraction of economic activity is set to continue in the first quarter of 2023. Growth is expected to return to Europe in spring, as inflation gradually relaxes its grip on the economy. However, with powerful headwinds still holding back demand, economic activity is set to be subdued, with GDP growth reaching 0.3% in 2023 as a whole in both the EU and the euro area.
By 2024, economic growth is forecast to progressively regain traction, averaging 1.6% in the EU and 1.5% in the euro area.
Full document: Autumn 2022 Economic Forecast
- Publication date
- 11 November 2022
- Representation in Ireland