The European Union, the Eurozone and most Member States will enter recession during the last quarter of this year. That is what the European Commission expects, she wrote in its new economic growth forecast on Friday. Despite this, economic growth in the eurozone is expected to be 3.2 percent over the whole of 2022, before falling to 0.3 percent in 2023. As for Belgium, the Commission forecasts economic growth of 2.8 percent this year and 0.2 percent next year. Inflation is expected to peak at 10.4 percent this year and fall to 6.2 percent next year.
The outlook contrasts with the forecasts made by the Commission last summer. Then she predicted growth in the eurozone of 2.6 percent this year and 1.4 percent next year. So now it is adjusting its growth forecasts for 2022 upwards (thanks mainly to the economic recovery in the first half of the year) and downwards for 2023 by no less than 1.1 percentage points (due to high inflation and the associated economic uncertainty).
Inflation in the eurozone is expected to peak at 8.5 percent this year, before falling in 2023 but remaining at a high level. Consumer prices are expected to rise by 6.1 percent next year, the Commission expects. As inflation continues to eat away at households’ disposable income, economic growth should still be negative in the first quarter of 2023. Only towards the spring, when inflation starts to decline, does the Commission expect positive growth figures again.
Situation in our country
As for Belgium, the Commission forecasts economic growth of 2.8 percent this year and 0.2 percent next year. Inflation is expected to peak at 10.4 percent this year and fall to 6.2 percent next year. Just like the entire eurozone, Belgium is therefore also entering a recession, according to the European Commission.
According to the Commission, the Belgian economy will grow by 2.8 percent over the entire year. This has everything to do with a strong first half, the effect of the relaxed corona measures. In the second half of this year, however, high inflation and declining consumer confidence weighed heavily on growth. As a result, growth fell to -0.1 percent in the third quarter. Growth would also be negative in the fourth quarter of -0.4 percent, which means that Belgium is officially entering a recession.
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