Economic and
Financial Affairs
Spring 2023
ISSN 2443-8014 (online)
European
Economic
Forecast
INSTITUTIONAL PAPER 200 | MAY 2023
EUROPEAN ECONOMY
European Economy Institutional Papers are important reports analysing the economic situation and
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CREDIT
Cover photography: © iStock.com/kwasny221
European Commission
Directorate-General for Economic and Financial Affairs
European Economic Forecast
Spring 2023
EUROPEAN ECONOMY Institutional Paper 200
ABBREVIATIONS
iii
Countries and regions
EU European Union
EA Euro area
BE Belgium
BG Bulgaria
CZ Czechia
DK Denmark
DE Germany
EE Estonia
IE Ireland
EL Greece
ES Spain
FR France
HR Croatia
IT Italy
CY Cyprus
LV Latvia
LT Lithuania
LU Luxembourg
HU Hungary
MT Malta
NL The Netherlands
AT Austria
PL Poland
PT Portugal
RO Romania
SI Slovenia
SK Slovakia
FI Finland
SE Sweden
BA Bosnia and Herzegovina
BR Brazil
CH Switzerland
CN China
IN India
IS Iceland
JP Japan
MD Moldova
NO Norway
MX Mexico
UA Ukraine
UK United Kingdom
US United States of America
AE Advanced economy
CEE Central and Eastern European
EFTA European Free Trade Association
EME Emerging markets economy
EMU Economic and Monetary Union
MENA Middle East and North Africa
ROW Rest of the World
iv
Economic variables and institutions
CPI Consumer price index
ECB European Central Bank
EUI Economic Uncertainty Indicator
ESI Economic Sentiment Indicator
FAO Food and Agriculture Organization of the United Nations
FED Federal Reserve Bank
GDP Gross Domestic Product
GNI Gross National Income
HICP Harmonised Index of Consumer Prices
NEER Nominal Effective Exchange Rate
OPEC Organization of the Petroleum Exporting Countries
PMI x
Other abbreviations
AF Autumn Forecast
APP ECB asset purchase programme
BCS Joint Harmonised EU Programme of Business and Consumer Surveys
CFCI Composite Financing Cost Indicator
COICOP Classification of individual consumption by purpose
COVID-19 Coronavirus disease 2019
DGSE Dynamic Stochastic General Equilibrium model
EUCAM European Union Commonly Agreed Methodology
GM European Commission's Global Multi-country model
HDD Heating degree days
NACE Statistical classification of economic activities in the European Community
NFC Non-financial corporation
NGEU NextGenerationEU
LNG Liquefied Natural Gas
PEPP ECB pandemic emergency purchase programme
PPP Purchasing power parity
RRF Recovery and Resilience Facility
RRP Recovery and Resilience Plan
SF Spring Forecast
SME Small and medium-sized enterprise
S&P GSCI Standard and Poor's Goldman Sachs Commodities Index
SVB Silicon Valley Bank
TFP Total factor productivity
TTF Title Transfer Facility
TLTRO III Targeted longer-term refinancing operations
VAT Value-added tax
WiF Winter interim Forecast
Graphs/Tables/Units
bbl Barrel
bcm Billion cubic meters
bn Billion
bp. /bps. Basis point / points
euro/MWh Euro per megawatt hour
GW Giga Watt
lhs Left hand scale
mn Million
pp. / pps. Percentage point / points
pt. / pts. Point / points
v
Q Quarter
q-o-q% Quarter-on-quarter percentage change
rhs Right hand scale
tr Trillion
y-o-y% Year-on-year percentage change
Currencies
EUR Euro
ALL Albanian lek
BAM Bosnian mark
BGN Bulgarian lev
CZK Czech koruna
DKK Danish krone
GEL Georgian lari
GBP Pound sterling
HUF Hungarian forint
ISK Icelandic krona
MDL Moldovan leu
MKD Macedonian denar
NOK Norwegian krone
PLN Polish zloty
RON New Romanian leu
RSD Serbian dinar
UAH Ukrainian hryvnia
RUB Russian ruble
SEK Swedish krona
CHF Swiss franc
JPY Japanese yen
CNY Chinese yuan renminbi
TRY Turkish lira
USD US dollar
CONTENTS
vii
Executive Summary 1
PART I: Economic outlook for EA and EU 7
1. Setting the scene 9
2. Economic outlook 13
2.1. International environment 13
2.2. Financial conditions in the EU 20
2.3. Economic activity 23
2.4. Labour market 33
2.5. Inflation 39
2.6. Current account 45
2.7. Public finances and the fiscal policy stance 46
3. Risks 53
4. Special issues 55
4.1. Medium-term projections of potential GDP growth in turbulent times 55
4.2. The new candidate countries included in the forecast 59
5. Boxes 65
PART II: Prospects by individual economy 67
Euro Area Member States 69
1. Belgium 70
2. Germany 72
3. Estonia 74
4. Ireland 76
5. Greece 78
6. Spain 80
7. France 82
8. Croatia 84
9. Italy 86
10. Cyprus 88
11. Latvia 90
12. Lithuania 92
13. Luxembourg 94
14. Malta 96
15. The Netherlands 98
16. Austria 100
17. Portugal 102
18. Slovenia 104
19. Slovakia 106
20. Finland 108
Non-EA Member States 111
21. Bulgaria 112
22. Czechia 114
23. Denmark 116
viii
24. Hungary 118
25. Poland 120
26. Romania 122
27. Sweden 124
Candidate Countries 127
28. Albania 128
29. Montenegro 130
30. North Macedonia 132
31. Serbia 134
32. Türkiye 136
Other non-EU Countries 139
33. The United Kingdom 140
34. The United States 142
35. Japan 144
36. China 146
37. EFTA 148
38. Russian Federation 151
Statistical Annex 155
Previous European Economic Forecasts 191
LIST OF TABLES
1. Overview - the Spring 2023 Forecast 2
I.2.1. International environment 16
I.2.2. Composition of growth, EU 27
I.2.3. Composition of growth, euro area 32
I.2.4. Labour market outlook, euro area and EU 37
I.2.5. Inflation outlook, euro area and EU 44
I.2.6. General Government budgetary position, euro area and EU 47
I.4.1. Main features of country forecast - Ukraine 61
I.4.2. Main features of country forecast - Moldova 62
I.4.3. Main features of country forecast - Bosnia and Herzegovina 64
LIST OF GRAPHS
I.2.1. Growth in global GDP and global PMIs 13
I.2.2. Global supply chain pressure index 14
I.2.3. Global freight indices 14
I.2.4. Global inflation 14
I.2.5. Oil price assumptions 14
I.2.6. Natural gas price developments and future prices 15
I.2.7. US exchange rate and bond yield 15
I.2.8. Contributions to global GDP growth (excl. EU) 19
I.2.9. Short-term euro interest rate expectations at different dates 21
I.2.10. Short-term interest rate expectations in non-euro area EU Member
States 21
I.2.11. Euro area benchmark interest rates 21
I.2.12. European stock prices 22
ix
I.2.13. Composite Financing Cost Indicator and credit to the euro area
private sector 23
I.2.14. GDP demand-side components, EU excluding IE 24
I.2.15. Saving rates in 2022 24
I.2.16. Short-term indicators, EU 26
I.2.17. ESI - consumer survey results, EU 26
I.2.18. Real GDP growth and its contributions, EU 27
I.2.19. Real gross disposable income and components, EU 28
I.2.20. Investment breakdown and investment rates since 2019, EU
excluding IE 32
I.2.21. Real GDP growth path, EU 33
I.2.22. Cumulative growth performance - distribution across Member
States 33
I.2.23. Labour market recovery since 2019, EU 36
I.2.24. Compensation per employee growth and HICP inflation in 2022
across Member States 36
I.2.25. Labour limiting production and vacancy rates, EU 37
I.2.26. Employment growth and unemployment rate, EU 37
I.2.27. Unemployment rates across Member States, 2022 and 2024 38
I.2.28. Annual energy inflation and contributions from key energy
commodities, euro area 39
I.2.29. Pipeline pressures for consumer food inflation, euro area 40
I.2.30. Pipeline pressures for consumer goods inflation, euro area 40
I.2.31. Share of services with positive inflation and annual inflation of
contact-intensive and other services, euro area 40
I.2.32. Structure of contributions to the annual headline inflation, euro
area 41
I.2.33. Measures of underlying price pressures, euro area 41
I.2.34. Disperion of annual inflation rates, EU 42
I.2.35. Inflation breakdown, EU 42
I.2.36. Inflation expectations derived from implied forward inflation-linked
swap rates 44
I.2.37. Core inflation vs. wage growth, cumulative in 2023-2024 44
I.2.38. Cumulative headline inflation across Member States, 2022-2024 45
I.2.39. Extra-EU trade balance, EU 45
I.2.40. Extra-EU trade balance, trade volume versus value 45
I.2.41. Trade balance and terms of trade of goods, EU 46
I.2.42. Current-account balance, EU 46
I.2.49. RRF grants absorption across Member States 47
I.2.43. Drivers of the change of the government balance, EU 47
I.2.44. Budget balance developments across Member States 47
I.2.45. Expenditure and revenues contributions to the change of general
government balance, EU 47
I.2.52. Fiscal stance in 2023 and 2024 across Member States 47
I.2.46. Public investment in 2019 and 2024 across Member States 48
I.2.47. Drivers of change in the debt-to-GDP ratio, EU 49
I.2.48. Debt developments across Member States 49
I.2.50. Fiscal stance and its components, EU 50
I.2.51. Nationally-financed net primary current expenditure, contribution
to the EU fiscal stance and drivers 50
I.4.1. Potential GDP growth breakdown, EU 56
I.4.2. Potential GDP breakdown, annual averages 2023-27, EU 56
I.4.3. Euro area output gap 58
I.4.4. Euro area potential GDP growth and the contribution of the energy
prices 58
x
LIST OF BOXES
I.1.1. Key assumptions underlying the forecast 10
I.2.1. European gas market: recent developments and outlook 17
I.2.2. Recent developments in bankruptcy declarations in the EU 25
I.2.3. Profit margins and their role in euro area inflation 29
I.2.4. Which Factors Shape Growth and Inflation Going Forward? Model-
Based Insights into the Spring Forecast 34
I.5.1. Some technical elements behind the forecast 65
FOREWORD
xi
The EU economy is managing the adjustment to the shocks unleashed by the pandemic and
wean itself off Russian gas. The modest growth registered in the first quarter of the year dispelled
fears of a winter recession which only a few months ago appeared unavoidable. Survey data,
moreover, suggest that though timid the expansion is set to continue in the second quarter. The
better-than-expected performance at the beginning of the year lifts the forecast for EU economic
growth marginally upwards.
This outcome owes much to the policies put in place by the EU and its Member States.
Diversification of energy sources and infrastructural investment to address gas supply bottlenecks
and boost renewable energy also supported by the Recovery and Resilience Facility have paid
off. Above all, the adaptation of the private sector has been impressive: pushed by high prices,
households and corporations have reduced gas consumption to well below the voluntary target of
15% set in the emergency Council Regulation (EU) 2022/1369. With gas storage levels at seasonal
record highs, the risk of future shortages has significantly abated, while prices are settling at levels
not seen since the summer of 2021.
The EU labour market has been outperforming expectations since the start of the pandemic. The
unemployment rate has hit successive record lows, while activity and employment rates have kept
surging. Average hours worked per person are also slowly converging to pre-pandemic levels,
suggesting that growth has not only been job-rich, but jobs created are of high quality. The outlook
is for unemployment to hover around record low levels, even as job growth takes a breather.
Fallin
measures and the gradual release of the extra savings accumulated during the pandemic mitigate
the negative impact on private consumption. In 2024, real wages are set to recover some of the
lost ground, while profit margins are expected to broadly stagnate.
The resilience of the EU economy, however, has also delayed the slowdown of inflation. Falling
energy commodity prices are driving a sharp fall in energy consumption bills and the overall rate
of price growth from its October peak, but core inflation has been firming. As a result, markets
have raised expectations about future policy rate hikes. The small contraction of core inflation in
April suggests that it has also peaked, but the convergence towards target is now expected to take
longer. Greater persistence of core inflation would call on monetary authorities to act even more
forcefully to stem inflationary pressures.
Fiscal policy has an important role to play at this critical juncture. Governments should seize the
opportunity of falling energy prices to phase out energy support measures, especially the
untargeted ones, to ensure debt sustainability, but also sustain the disinflationary efforts of
monetary authorities and limit the risk of entrenching dangerous inflation differentials. The
legislative proposals for a reformed economic governance framework presented by the
Commission on 26 April 2023 (COM(2023) 240 to 242 final) should help Member States
strengthen public debt sustainability, and promote sustainable, inclusive and resilient growth
through reforms and investment.
Director General
Economic and Financial Affairs
AN IMPROVED OUTLOOK AMID PERSISTENT
CHALLENGES
EXECUTIVE SUMMARY
1
Over the past winter, the EU economy performed better than expected.
As the disruptions caused by the war in Ukraine and the energy crisis
clouded the outlook for the EU economy, and monetary authorities
around the world embarked on a forceful tightening of monetary
conditions, a winter recession in the EU appeared inevitable last year.
The Autumn 2022 Forecast had projected the EU economy to contract
in the last quarter of 2022 and the first quarter of 2023. Instead,
latest data point to a smaller-than-projected contraction in the final
quarter of last year and positive growth in the first quarter of this year.
The better starting position lifts the growth outlook for the EU economy
for 2023 and marginally for 2024. Compared to the Winter 2023
interim Forecast, EU GDP growth is revised up to 1.0% in 2023 (from
0.8%) and 1.7% in 2024 (from 1.6%), virtually closing the gap with
potential output by the end of the forecast horizon (see Special Issue
I.4.1). Upward revisions for the euro area are of a similar magnitude,
with GDP growth now expected at 1.1% and 1.6% in 2023 and 2024
respectively. Inflation also surprised again to the upside, and it is now
expected at 5.8% in 2023 and 2.8% in 2024 in the euro area,
respectively 0.2% and 0.3% higher than in winter.
The growth outlook
improves, but inflation is
projected still high this
year
rate
2022 2023 2024 2022 2023 2024 2022 2023 2024 2022 2023 2024 2022 2023 2024
Belgium
3.2 1.2 1.4 10.3 3.4 3.5 5.6 5.8 5.7 -2.9 -1.8 -1.8 -3.9 -5.0 -4.7
Germany
1.8 0.2 1.4 8.7 6.8 2.7 3.1 3.2 3.1 4.0 5.8 5.6 -2.6 -2.3 -1.2
Estonia
-1.3 -0.4 3.1 19.4 9.2 2.8 5.6 6.2 6.1 -1.3 -0.3 0.1 -0.9 -3.1 -2.7
Ireland
12.0 5.5 5.0 8.1 4.6 2.6 4.5 4.3 4.3 8.8 11.1 11.9 1.6 1.7 2.2
Greece
5.9 2.4 1.9 9.3 4.2 2.4 12.5 12.2 11.8 -11.8 -9.2 -7.8 -2.3 -1.3 -0.6
Spain
5.5 1.9 2.0 8.3 4.0 2.7 12.9 12.7 12.4 0.6 1.6 1.5 -4.8 -4.1 -3.3
France
2.6 0.7 1.4 5.9 5.5 2.5 7.3 7.4 7.5 -3.1 -1.5 -1.3 -4.7 -4.7 -4.3
Croatia
6.2 1.6 2.3 10.7 6.9 2.2 7.0 6.6 6.1 -0.2 0.7 1.1 0.4 -0.5 -1.3
Italy
3.7 1.2 1.1 8.7 6.1 2.9 8.1 7.8 7.7 -1.3 0.0 1.3 -8.0 -4.5 -3.7
Cyprus
5.6 2.3 2.7 8.1 3.8 2.5 6.8 6.9 6.4 -9.1 -7.3 -6.9 2.1 1.8 2.1
Latvia
2.8 1.4 2.8 17.2 9.3 1.7 6.9 6.8 6.5 -6.1 -3.4 -2.7 -4.4 -3.8 -2.7
Lithuania
1.9 0.5 2.7 18.9 9.2 2.2 6.0 6.6 6.5 -5.3 -1.1 -0.1 -0.6 -1.7 -1.4
Luxembourg
1.5 1.6 2.4 8.2 3.2 2.6 4.6 4.8 5.0 5.7 7.2 7.4 0.2 -1.7 -1.5
Malta
6.9 3.9 4.1 6.1 5.4 2.8 2.9 2.9 2.9 1.6 3.8 4.1 -5.8 -5.1 -4.5
Netherlands
4.5 1.8 1.2 11.6 4.9 3.3 3.5 3.8 3.9 4.4 6.0 6.1 0.0 -2.1 -1.7
Austria
5.0 0.4 1.6 8.6 7.1 3.8 4.8 4.9 5.0 0.2 0.8 1.2 -3.2 -2.4 -1.3
Portugal
6.7 2.4 1.8 8.1 5.1 2.7 6.0 6.5 6.3 -1.5 1.0 0.8 -0.4 -0.1 -0.1
Slovenia
5.4 1.2 2.2 9.3 7.0 3.8 4.0 3.9 3.8 -0.5 0.9 1.7 -3.0 -3.7 -2.9
Slovakia
1.7 1.7 2.1 12.1 10.9 5.7 6.1 5.8 5.4 -7.8 -6.7 -5.3 -2.0 -6.1 -4.8
Finland
2.1 0.2 1.4 7.2 4.8 2.1 6.8 7.1 6.8 -3.9 -1.9 -1.2 -0.9 -2.6 -2.6
Euro area (20)
3.5 1.1 1.6 8.4 5.8 2.8 6.8 6.8 6.7 0.6 2.1 2.4 -3.6 -3.2 -2.4
Bulgaria
3.4 1.5 2.4 13.0 9.4 4.2 4.3 4.3 4.0 -0.4 0.1 0.2 -2.8 -4.8 -4.8
Czechia
2.5 0.2 2.6 14.8 11.9 3.4 2.2 2.8 2.6 -5.4 -2.5 -0.7 -3.6 -3.6 -3.0
Denmark
3.8 0.3 1.5 8.5 4.3 2.5 4.5 5.0 5.1 13.1 10.7 10.7 3.3 2.3 1.3
Hungary
4.6 0.5 2.8 15.3 16.4 4.0 3.6 4.2 4.0 -8.3 -3.5 -2.8 -6.2 -4.0 -4.4
Poland
5.1 0.7 2.7 13.2 11.7 6.0 2.9 3.3 3.2 -3.2 -1.0 0.5 -3.7 -5.0 -3.7
Romania
4.7 3.2 3.5 12.0 9.7 4.6 5.6 5.4 5.1 -8.8 -7.6 -7.4 -6.2 -4.7 -4.4
Sweden
2.6 -0.5 1.1 8.1 6.0 1.9 7.5 7.7 8.2 4.4 5.9 6.3 0.7 -0.9 -0.5
EU
3.5 1.0 1.7 9.2 6.7 3.1 6.2 6.2 6.1 0.5 2.0 2.3 -3.4 -3.1 -2.4
United Kingdom
4.1 -0.2 1.0 7.9 6.7 2.4 3.7 4.3 4.6 -3.8 -2.2 -1.7 -5.2 -3.2 -2.4
China
3.0 5.5 4.7 : : : : : : 2.2 1.6 1.3 : : :
Japan
1.0 1.1 1.0 2.5 3.2 1.8 2.6 2.5 2.4 2.1 2.6 3.4 -8.0 -6.5 -4.4
United States
2.1 1.4 1.0 8.0 4.3 2.6 3.5 4.1 4.8 -3.9 -3.3 -3.0 -4.0 -5.0 -5.5
World
3.3 2.8 3.1 : : : : : : : : : : : :
Table 1:
Overview - the Spring 2023 Forecast
Real GDP
Inflation
Unemployment
Current account
Budget balance
European Economic Forecast, Spring 2023
2
Model-based analysis suggests that the improved outlook is driven by
the terms-of-trade countershock caused by declining energy prices,
while broad price-increasing supply-side factors lead to inflation
persistence (see Box I.2.4). Recent economic developments seem to
corroborate these results.
estimate, in 2023-Q1 GDP grew by 0.3% in the EU and by 0.1% in the
euro area, a notch above the Winter interim Forecast projections. Lower
energy prices, abating supply constraints, improved business
confidence and a strong labour market underpinned this positive
outcome. As for inflation, the headline index continued to decline in the
first quarter of 2023, amid sharp deceleration of energy prices, but
core inflation firmed, pointing to persistence of price pressures. For the
second quarter, survey indicators suggest continued expansion, with
services clearly outperforming the manufacturing sector and consumer
The EU weathered the energy crisis well thanks to the rapid
diversification of supply and a sizeable fall in consumption (see Box
I.2.1). As the EU approaches the gas-refilling season, gas storage levels
are at comfortable levels and risks of shortages during next winter
have considerably abated. Further supply diversification and the
accelerated increase in renewable power generation are expected to
allow the EU to continue replacing fossil-based sources, including gas,
while reducing the likelihood of renewed price pressures. At the cut-off
date of this forecast, wholesale gas prices were projected to be 25%
expectations at the time of the previous Commission forecast. Oil
prices were also expected to be 10% lower, compared to early
February, in both 2023 and 2024.
The sharp deterioration of terms of trade in 2021 and 2022, as energy
(imported) prices surged, resulted in a transfer of purchasing power
from the EU to the rest of the world. With energy prices rapidly falling,
the expected improvement in terms of trade over the forecast horizon
will drive a reversal of this effect, to the benefit of all domestic sectors
of the economy households, corporates and governments. So far,
households and public finances have taken a large part of the brunt of
high imported inflation, as employment growth only partially offsets
the fall in real wages and public finances set out to protect households
and corporations from the adverse impact of high energy prices.
Companies have been generally successful in passing on higher
production costs to consumers (see Box I.2.3). However, the most
energy-intensive sectors and companies have been struggling. Going
forward, households are set to see their real disposable incomes finally
increase in 2024, while falling energy prices allow governments to
contain the cost of support measures or phase them out altogether.
The progressive firming of core inflation has set EU monetary
authorities on a path of more forceful monetary tightening. In its
meeting of 5 May i.e. shortly after the cut-off of this forecast the
ECB Governing Board lifted policy rates by 25 basis points, down from
50 basis points in the previous two rounds of policy hikes. This was
largely anticipated by market agents. At the cut-off date of this
forecast, the euro area short-term rate was expected to peak at 3.8%
A better-than-expected
start of the year for the
EU economy
The key positive change
underpinning this forecast
is the further fall in
energy commodity prices.
An important terms-of-
trade countershock is
making its way through
the economy
Higher policy interest
rates and increased risk
perception are leading to
further tightening in
financial conditions
Executive Summary
3
in 2023-Q3, before abating in the course of 2024. Long-term interest
rates have hardly moved. Tighter monetary conditions are feeding
through the credit channel: borrowing costs are increasing, while credit
flows are decreasing. The collapse of Silicon Valley Bank and two other
US banks and the problems with Credit Suisse compound with the
effects of higher policy rates. While well-capitalised and thoroughly
supervised, EU ban
further tightening of lending standards. As usual, projections about
interest rates underpinning this forecast reflect market expectations at
the time of the forecast. Moreover, this forecast assumes an orderly
adjustment of the financial sector to higher policy rates, while risks
stemming from exposures to households and corporates are assumed
to be manageable (see Box I.1.1). While bankruptcies increased
significantly towards the end of last year, the surge largely reflects a
clearing of the insolvency backlog created by support schemes during
the pandemic and country-specific developments related to changes in
insolvency regulations (see Box I.2.2).
The tightening of financing conditions is expected to weigh on
investment over the forecast horizon. Housing investment, which is
particularly sensitive to interest rates, is set to contract. By contrast,
business investment is projected to still increase, though at a slower
sheet position. Finally, public investment is forecast to remain buoyant
in both 2023 and 2024 thanks to the continued deployment of the
Recovery and Resilience Facility (RRF). Overall, investment growth is
projected to decelerate markedly from 4% in 2022 to 0.9% in 2023.
Gradual normalisation of economic activity is expected to reinvigorate
rall investment growth up
by 2.1% in 2024.
Inflation keeps eroding the purchasing power of consumers. Following
the fall in the last quarter of 2022, private consumption is expected to
have weakened again in the first quarter of this year. Overall, private
consumption growth in the EU in 2023 is projected at 0.5%. As inflation
rebound to 1.8% in 2024. The household saving rate is projected to
decrease in the EU from 13.2% in 2022 to 12.8% in 2024, in line with
its long-term average.
The slower pace of economic expansion in the EU is set to have a
limited impact on the EU labour market. Continued labour market
tightness, labour hoarding due to skill shortages as well as strong
demand, especially for services, are expected to cushion the impact of
the economic slowdown on the labour market. Employment growth is
still forecast at 0.5% in the EU this year. In 2024, employment is set to
keep growing moderately (0.4%), implying a less job-rich growth than
in 2022. The unemployment rate is expected to remain close to its
historical low, at 6.2%, in the EU in 2023, before edging down to 6.1%
in 2024. After growing by 5.0% in 2022, the annual growth rate of
compensation per employee is projected to increase to 5.9% in 2023
before falling to 4.6% in 2024. This means that real wages are still set
to decrease this year, though a slight pick-up in real wages is expected
towards the end of the year.
Tighter financing
conditions weigh on
investment, but
countervailing factors are
at play
Consumption is set to
remain subdued in 2023,
employment growth and
progressive recovery in
real wages
European Economic Forecast, Spring 2023
4
Sharply lower natural gas prices are making their way to retail prices of
gas and electricity, though at varying speeds across EU Member States.
At the same time, all other major inflation subcomponents (processed
and unprocessed food, non-energy industrial goods and services) have
seen their annual inflation rate increase between December and March.
Consequently, core inflation (headline excluding energy and
unprocessed food) continued to rise in early 2023, to a historical high
of 7.6% in March, and core goods and services replaced energy as the
primary driver of headline inflation in the EU. Recent indications on
indicators corroborate the projection of core inflation having peaked in
the first quarter. Core inflation is projected to decline gradually as
profit margins absorb higher wage pressures and tighter financing
conditions prove effective. Average core inflation in 2023, at 6.9% in
the EU, is set to exceed that in 2022, before falling to 3.6% in 2024,
above headline inflation in both forecast years.
The economic expansion and reduced pandemic-related emergency
measures supported the further reduction of the EU government deficit
in 2022, to 3.4% of GDP, despite the expansionary fiscal stance driven
by sizeable energy support measures. In 2023 and especially in 2024,
the phasing out of energy support measures is expected to drive
further deficit reductions on aggregate in the EU, to 3.1% and 2.4% of
GDP, respectively, and the corresponding fiscal impulse should turn
contractionary. However, several Member States are still projected to
see a deterioration in their general government balance in 2023, as
their fiscal stance remains expansionary. While falling energy prices are
helping to contain the cost of existing support measures, several
Member States have introduced new energy support measures or are
extending existing ones. Furthermore, while inflation supported the
improvement in the government balance ratio in 2022, some reversal
of this effect is expected in 2023 as large expenditure items like
pensions and other social transfers, as well as public wages, are
unchanged policies, the deficit reduction is set to be broad-based
across countries. Meanwhile, the EU aggregate debt ratio is expected to
fall in 2023-24 despite debt-increasing primary deficits, thanks to
economic growth and inflation. Higher interest rates are affecting the
cost of servicing public debts only gradually thanks to their long
maturity. The EU debt-to-GDP ratio fell to around 85% of GDP in 2022,
from the record high of 92% recorded in 2020. It is projected to further
decline to below 83% of GDP in 2024, but to remain above the pre-
COVID-19 crisis level of around 79% in 2019.
Global growth, excluding the EU, is expected to fall from 3.2% in 2022
to 3.1% in 2023, before rising back to 3.2% in 2024, broadly
unchanged since the Winter interim Forecast. The outlook for external
demand facing the EU has however been significantly downgraded, as
synchronised weakness in advanced economies (and especially in the
US) weighs heavily on EU exports. The rebound in economic activity in
China, moreover, is set to benefit primarily the domestic sectors,
services in particular, with limited positive spillovers to the EU. Still, net
external demand is expected to contribute positively to GDP due to
weak import dynamics especially for goods in 2023. The current
account balance is set to improve steadily from the record-low surplus
of 1.6% of GDP in 2022 to 3.5% in 2024. The improvement is mainly
The slowdown of core
inflation is set to be more
gradual than previously
projected
The phasing out of
discretionary policy is
expected to drive further
improvements in the
government balance
External balances are set
to improve significantly
Executive Summary
5
driven by the merchandise trade balance, which is forecast to turn
positive this year and improve further next year, largely as a
consequence of falling import prices. The services trade balance is
forecast to remain strong throughout the forecast horizon, with tourism
being a strong driver of the economic rebound. This publication includes
for the first time an overview of the economic structural features,
recent performance and outlook for Ukraine, Moldova and Bosnia and
Herzegovina, which were granted candidate status for EU membership
by the Council in June 2022 and December 2022 (see Special Issue
I.4.2).
While the outlook in our central scenario has not changed much since
last winter, downside risks to the economic outlook have increased.
Persistence of core inflation has emerged as a key risk. It could
continue restraining the purchasing power of households and force a
stronger response of monetary policy, with broad macro-financial
ramifications. Moreover, a surge in risk aversion in financial markets,
following the banking sector turmoil originated in the US, could prompt
a more pronounced tightening of lending standards than assumed in
this forecast. In this context, policy consistency has become even more
important. An expansionary fiscal policy stance would fuel inflation
further, leaning against monetary policy action. In energy markets, the
threat of outright supply shortages for next winter has significantly
abated, but the evolution of prices remains highly uncertain. More
benign developments in energy prices would lead to a faster decline in
headline inflation, with positive spillovers on domestic demand. Risks
new uncertainties following the banking sector turbulence or related to
wider geopolitical tensions. Finally, there is persistent uncertainty
The balance of risks tilts
back to the downside
PART I
Economic outlook for EA and EU
1. SETTING THE SCENE
9
The European economy continues to show resilience in a challenging global context. In
the second half of 2020, a vigorous and synchronised economic rebound had already started to
push up the prices of several global commodities, especially energy and food. The build-up of
tensions and subsequent invasion of Ukraine by Russia intensified pressures on the European gas
market, which at one point even faced risks of outright gas shortages. As the energy crisis loomed
large in Europe, several private sector and institutional forecasters expected the EU economy to
fall into a winter recession. The Commission Autumn Forecast (AF) had projected the EU economy
to contract in the last quarter of 2022 and the first quarter of 2023. Though relatively shallow and
short-lived, the recession was expected to be broad-based across Member States and demand
components. By the time of the Winter interim Forecast (WiF), the EU economy was estimated to
have broadly stagnated in the last quarter of 2022, while tumbling energy prices suggested that it
would avoid a contraction of activity also in the first quarter of 2023. Latest estimates show that
economic activity even managed a small expansion in the first quarter of this year.
A strong labour market has been an important element of resilience. At the end of last
year, the EU labour market hit new records across several key metrics, including activity,
employment and unemployment rates. Since then, the unemployment rate went down further,
reaching 6% in March. Vacancy rates and reported labour shortages remained high by historical
markedly, as employment growth only partially offset the fall in real wages. Nominal wage growth
picked up strongly in the fourth quarter but continued to fall short of inflation dynamics. Key
questions for the forecast are whether tightness in the labour market will ease and the extent to
which wage growth will allow recouping the lost purchasing power, while not adding to inflationary
pressures.
A sizeable terms-of-trade counter-shock is in the making. Diversification of energy supply
and demand reduction allowed the EU to largely wane itself off its dependence on Russian gas,
with no major disruptions for economic activity. With gas storage levels at record high, refilling
needs ahead of next winter appear manageable and gas prices have fallen below pre-war levels
(but are still around twice their pre-COVID-19 readings). At the cut-off date of this forecast,
futures markets pointed to stability at current prices over the forecast horizon. The outlook for oil
implies that the large terms-of-trade shock that weighed on economic performance and public
finances in 2022 is being undone. The direct benefit will be lower energy inflation and lower
production costs across a broad array of goods and services. The projected improvement in the
terms of trade will support the domestic economy, though the distribution of benefit among
households, corporates and governments will depend on the - largely country-specific on fiscal
markets.
Persistent core inflation is slowing down the disinflationary forces of lower energy
prices. The combined impact of pent-up demand, global supply disruptions and war-related
energy and food commodities shocks pushed inflation to successive record highs. While the decline
in energy prices has been stronger than previously expected, price pressures have progressively
broadened and are by now predominantly domestic. As a result, energy and headline inflation
peaked towards the end of 2022, but core inflation was still strong and trending up throughout the
first quarter. High core inflation readings signal some entrenched dynamics that will likely require
more time than previously expected to be brought under control.
Monetary authorities face a delicate balancing act. The adjustment to a rapidly changing
interest rate environment is proving challenging. The collapse of Silicon Valley Bank and two other
US banks, as well as the problems with Credit Suisse, appear by now as largely idiosyncratic
shocks. Especially in the EU, the banking sector is assessed to be solid, thanks to high capital and
liquidity buffers. As largely expected by markets, shortly after the cut-off of this forecast, the ECB
European Economic Forecast, Spring 2023
10
Governing Board lifted policy rates by 25 basis points, down from 50 basis points in the previous
two rounds of policy hikes. While this signals a slowing pace of monetary policy normalisation, the
outlook for the broad financial conditions in the economy has become more uncertain following
the emergence of financial stability risks and increased uncertainty around the inflation outlook.
While the path of monetary policy will remain data-dependent, banks may tighten standards
further as they increase their risk perceptions and retail and wholesale funding becomes costlier
and more difficult to access. Market-based expectations as customary serve as anchor for the
forecast and suggest that the ECB is nearing the final stage of its tightening. This working
assumption is complemented with the additional assumption that EU banks and the broader
financial system will adjust smoothly to a higher interest rate environment and remain overall
well-insulated from potential shocks originating in other jurisdictions. For both assumptions to
prove right, it will be important that fiscal policy does not lean against the action of central banks.
The extent to which governments will seize the opportunity of lower energy prices to
phase out the energy support measures will determine the future trajectory of public
finances. Faced with soaring energy prices, EU governments rolled out sizeable measures to
protect households and corporations from the adverse impact of high energy prices. The measures
are exerting a significant drag on public finances. Yet, helped by strong nominal GDP growth,
general government deficits narrowed more than previously expected in 2022. An important
question for this forecast is to what extent EU governments will be able to seize the opportunity of
lower gas and oil prices to phase out or let expire popular energy subsidies. Continued
expansionary budgetary measures at the current juncture would add to core inflationary pressures
via the demand channel, in turn adding pressure on central banks to step up monetary policy
tightening, with negative implications for public and private sector financing conditions and
financial stability at large.
Beyond these largely endogenous forces, the EU economic outlook continues to depend
crucially on developments in its eastern neighbourhood.
war of aggression against Ukraine, there is no sign of a let-up in the fighting, let alone any
peaceful resolution of the conflict. It is impossible at this stage to foresee the potential unfolding
therefore continues to rest on the assumption that geopolitical tensions will remain at the current
exceptionally high level over the forecast horizon (see Box I.1.1.). As a direct consequence, all
sanctions against Russia stipulated until the cut-off date are assumed to remain in place over the
forecast horizon.
Economic outlook for EA and EU
11
Box I.1.1: Key assumptions underlying the forecast
In a context of still high uncertainty, forecasts continue to rely heavily on ad-hoc assumptions. The
assumptions underpinning the Spring 2023 Forecast are largely unchanged since the Winter 2023
interim Forecast and the Autumn 2022 Forecast.
Russian invasion of Ukraine and geopolitical tensions
The economic impact of the war remains highly uncertain and depends crucially on its evolution. The
central scenario assumes persisting geopolitical tensions. As a result, all sanctions against Russia
stipulated until the cut-off date of the forecast, including those already implemented
annexation of Crimea in 2014, are assumed to remain in place throughout the forecast horizon.
People fleeing the war in Ukraine to the EU
It is assumed that the number of active temporary protection registrations will continue to increase in
the course of 2023, albeit at a slowing pace.
This results in an annual average of active registrations
of about 4.2 million in 2023 and 4.5 million in 2024. The Autumn 2022 Forecast and Winter 2023
interim Forecast assumed that the number of active registrations would reach 4.5 million already by
end-2022 and remain constant thereafter.
(1)
Assumptions on the geographical distribution of people
fleeing the war and their labour market integration remain broadly unchanged compared to the Autumn
2022 Forecast.
The COVID-19 pandemic
The Spring 2023 Forecast assumes that the pandemic will not cause any major disruptions in the EU
economy over the forecast horizon.
Financial stability
The collapse of Silicon Valley Bank and two other US banks, as well as the problems with Credit Suisse,
appear by now as largely idiosyncratic shocks, but in a context of rising interest rates new episodes of
financial stress may emerge. As customary, this forecast assumes the path of monetary tightening
implicit from money market spot and future prices. This working assumption is complemented with the
additional assumption that EU banks and the broader financial system will adjust smoothly to a higher
interest rate environment and remain overall well-insulated from potential shocks originating in other
jurisdictions.
(1)
The number of beneficiaries of temporary protection in the EU reached about 3.8 million by end-2022. See
Eurostat’s monthly statistics at: https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Temporary_protection_for_persons_fleeing_Ukraine_-_monthly_statistics.
2. ECONOMIC OUTLOOK
13
2.1. INTERNATIONAL ENVIRONMENT
The global economy saw a broad-based slowdown in late 2022. After picking up in the third
quarter of 2022, global growth slowed abruptly in the fourth quarter, and is estimated to have
fallen to around 0.7% q-o-q, less than half the pace seen in the previous quarter. Among the
advanced economies, the slowdown was most marked in the EU, while growth in the US fell only
marginally. Activity in the emerging market economies (EMEs) also slowed in the final quarter of
last year, driven in large part by a flat fourth quarter in China. Most G20 economies saw a decline
in the pace of growth in 2022-Q4.
Survey data suggest an acceleration of
economic activity in early 2023, with a
notable pick-up in EMEs and services. After
trending steadily downwards from mid-2022,
global PMI indicators rebounded in late 2022 and
maintained a positive trajectory in early 2023 (see
Graph I.2.1). The global services PMI moved into
expansionary territory, rising from 48 in December
to 54.4 in March. The improvement in services is
visible for advanced and, especially, emerging
economies, influenced by improved prospects for
China following the end of the zero-COVID policy
in December 2022. The PMI global composite
manufacturing index also improved, but remained
weaker and in negative territory, edging up from
48.7 in December to 49.6 in March.
Available GDP data for 2023-Q1 show a very mixed picture, even within regions. In the
United States, growth slowed to 0.3% q-o-q, from 0.6% q-o-q in 2022-Q4. In the EU it rose to
0.3%, from -0.1% in 2022-Q4. China saw growth pick up much more briskly after the re-opening,
growing by 2.2% q-o-q (4.5% y-o-y). Elsewhere in Asia, South Korea saw a modest acceleration, to
0.3%; Hong Kong by 5.3%; while growth in Singapore and Taiwan turned negative.
Global goods trade contracted at the turn of the year. Global world merchandise trade
volumes (imports and exports) rose by just 3.2% in 2022, compared to 10.3% in 2021 (following a
fall of -5.1% in 2020). As economic activity weakened in late 2022, the momentum (3-month-on-
3-month growth) in global goods trade turned negative in November across both advanced
economies and EMEs and remained in negative territory in January and February of 2023.
Emerging markets in Asia, Latin America and MENA have all seen a slowdown in merchandise
trade, with only Central and Eastern Europe seeing an increase. Global trade in goods was 1.8%
lower in the first two months of 2023 compared to the same period a year earlier.
Global supply chain disruptions have largely mended.
Supply Chain Pressure index fell steadily through 2022 and early this year, with the index in March
2023 going below pre-pandemic levels, suggesting that global supply chain operations have been
restored (see Graph I.2.2). Maritime port congestion is also easing, with the share of global freight
in stationary ships falling below 8% in March. Global delivery times from PMIs also improved in
early 2023, with the indices for China, the US and the euro area all moving above 50 in February
2023, and most regions seeing further improvement in March. The slowdown in global goods trade
in recent months has added to downward pressure on container shipping rates, which have fallen
back sharply from the peak reached at end-2021 and are currently at levels last seen in May
2020, before the pandemic-induced spike (see Graph I.2.3). Related to this, the orders-to-inventory
ratios hovered below one in major advanced economies in 2023-Q1.
30
35
40
45
50
55
60
65
70
75
-8
-6
-4
-2
0
2
4
6
8
10
19 20 21 22 23
q-o-q %
Graph I.2.1: Growth in global GDP and global PMIs
GDP contribution emerging markets
GDP contribution advanced economies
Global manufacturing PMI (rhs)
Global services PMI (rhs)
Sources: OECD, IMF and national sources for GDP, S&P Global for PMI.
Index, > 50
= expansion
European Economic Forecast, Spring 2023
14
Global headline inflation fell from the 2022
peaks, but core inflation does not yet show a
clear downward trend. Global inflation rates
surged in 2022, propelled by high demand for
goods, disrupted supply chains and sharply rising
commodity prices particularly after the Russian
invasion of Ukraine in February last year (see
Graph I.2.4). The steep appreciation of the US
dollar through much of 2022 added to global
price pressures for commodity importers and
rising inflation prompted a steep tightening of
monetary policy. Headline inflation rates started
to fall in early 2023 thanks to lower energy prices
and large base effects, reduced supply chain
pressures and a monetary policy effect. Core
inflation has, however, seen little downward adjustment compared to mid-2022.
Oil prices have fallen from the peak reached in mid-2022, though they recorded a short-
lived uptick in early April following an OPEC+ announcement of supply cuts. Oil prices
reached a peak of nearly 120 USD per barrel in mid-2022, but have since fallen steadily and
dipped to as low as 70 USD per barrel in the wake of the collapse of Silicon Valley Bank (SVB) in
March. The OPEC+ announcement of supply cuts in early April (to cut 1.2 million bbl/day from May
to end of 2023) led to an initial increase in the spot price of around 10 USD per barrel, but spot
prices have subsequently given up most of this gain, and had fallen back to around 80 USD per
barrel at the cut-off date for this forecast.
The outlook is for further moderation in oil
prices (see Graph I.2.5). Like spot prices, futures
prices moved up following the OPEC+
announcement in April, but they still point to
further moderation ahead, with prices for both
2023 and 2024 marginally below those reached
in winter. The oil market remains subject to
considerable uncertainty related to Russian
exports, fuelled by mismatches between official
announcements and observed oil exports. The
embargo on petroleum products and the G7+ oil
price cap appear to have had the intended impact
of lowering prices for Russian oil. While Russia has
managed to redirect crude oil exports to buyers
such as China, India and Türkiye, Urals oil is
trading at a discount of around 20 USD/bbl compared to Brent. The outlook for global demand, and
-2
-1
0
1
2
3
4
5
Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
Graph I.2.2: Global supply chain pressure index
Source: FED of New York.
Standard deviations
from average value
0
100
200
300
400
500
600
700
800
900
May-20 Nov-20 May-21 Nov-21 May-22 Nov-22
Graph I.2.3: Global freight indices
Baltic Dry Index Global Container Freight Index
Sources: Baltic Exchange and Freightos.
Index, 1 May
2020=100
0
1
2
3
4
5
6
7
8
9
Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
Graph I.2.4: Global inflation
CPI Advanced (ex. US) Core CPI Advanced (ex. US)
CPI Emerging Core CPI Emerging
CPI US Core CPI US
Source: FED of Dallas.
Note: Last data point refers to February 2023.
y-o-y %
change
0
20
40
60
80
100
120
140
2019 2020 2021 2022 2023 2024
price per bbl
Graph I.2.5: Oil price assumptions
USD/bbl
EUR/bbl
assumptions
Economic outlook for EA and EU
15
in particular Chinese demand as mobility recovers, is one of the key factors likely to affect the
evolution of crude prices over the forecast horizon.
European TTF gas prices have dropped
sharply since their August peaks and
continued to slide in the first four months of
2023. The price of TTF gas at the cut-off date of
this forecast was just below 40 Euro/MWh,
compared to around 50 Euro/MWh in the winter.
Futures prices are currently rather flat, hovering
around 50 Euro/MWh over the forecast horizon.
This represents a major decline in contracted gas
prices since autumn, with a fall of more than 50%
in 2023 compared to prices expected in October
(see Box I.2.1 for more details on latest gas
market developments). Compared to the Winter
interim Forecast, average gas prices are 24% and
13% lower in 2023 and 2024, respectively.
The downward trend in agricultural commodity prices continues. The FAO Food Price Index
fell again in March 2023, the twelfth consecutive monthly decline in a row, and prices are now
20.5% below the peak reache
The decline in the index over the past year has been largely driven by large falls in prices for
cereals and vegetable oils, while prices for meat and dairy products show more modest declines.
The price of sugar, by contrast, has been rising for some months and remains above the March
2022 level. The level of food prices overall remains around 30% above 2020 levels.
Metals prices have also fallen back from peaks reached in 2022 and are substantially
lower than a year ago. After spiking in early 2022, the S&P Goldman Sachs Commodities Index
-opening sparked a rally
in early 2023, with prices for steel, iron ore, copper and others seeing a notable bounce. They have,
however, since retreated, with those of zinc and lithium in particular falling considerably. Overall,
prices remain well below 2022 peaks, but showing little clear trend over the past six months.
The March turmoil in the US banking sector
brought financial stability considerations to
the fore. Strong US employment data in January
and an only limited downtick in core inflation in
February prompted a sharp increase in the
spike in US treasury yields in February, with the 2-
year note rising almost 100 basis points, and the
10-year up 50 basis points (see Graph I.2.7). With
the collapse of SVB in early March, the 2-year and
10-year treasury yields fell back close to the
levels seen in January. US and global equity
markets also saw a sharp downward adjustment
in the wake of the SVB collapse and a sell-off in
banking stocks, but the main indices have
rebounded quickly. However, the collapse of another mid-sized US bank, the First Republic Bank,
again raised concerns about contagion in the banking sector. Domestic credit conditions have
tightened, especially among small and medium sized banks, which traditionally provide credit to
smaller, local or more specialized businesses.
Growth in the US is expected to remain subdued in the coming quarters. The slowdown in
2023-Q1 was largely driven by inventories, while personal consumption remained resilient,
supported by strong employment growth. The US labour market remains tight, with high vacancy
20
50
80
110
140
170
200
230
260
Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24
Futures (10-day mov avg) At the time of AF 22
At the time of WiF 23 SF 23
Graph I.2.6: Natural gas price developments and future prices
80
85
90
95
100
105
110
115
120
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Jan-19 Jan-20 Jan-21 Jan-22 Jan-23
Graph I.2.7: US exchange rate and bond yield
10 year T-bill yield US Dollar Index (rhs)
Sources: US Department of the Treasury and NYSE Euronext.
%
Index, 1 January
2019 = 100
European Economic Forecast, Spring 2023
16
levels and a low unemployment rate, but is expected to soften in 2023-H2 when the full impact of
higher policy rates and tighter credit conditions is set to be felt. After growing by 2.1% in 2022, US
real GDP is forecast to expand at a rate of 1.4% in 2023. Although the US economy is expected to
gradually pick up momentum in the course of 2024, overall growth for the year is projected to be
just 1% in 2024 due to the weak carry-over from 2023.
Prospects for other advanced economies are also subdued. The Japanese economy grew by
1% in 2022, hampered by softer external demand. It is expected to expand by around 1% in both
2023 and 2024, as growth in private demand moderates, with a fading impact of post-COVID-19
reopening and lower fiscal support. The UK economy grew by 4.1% in 2022, but is expected to see
a contraction in 2023 despite the recent falls in energy prices. It is then set to only modestly
rebound in 2024 as high inflation continues to erode household incomes and business investment
remains stagnant. Canada is projected to keep expanding, but at a weaker pace than in 2022.
-COVID policy in late
2022, but challenges remain. High frequency indicators (PMIs, consumer confidence, the
property sector) have improved markedly since the government abandoned its strict COVID-19
containment policy, and GDP grew by 4.5% year-on-year in 2023-Q1. Household consumption is
expected to be the main driver of growth in 2023, supported by an improving labour market and a
gradual reduction of the household saving rate towards its pre-pandemic level. Fiscal and
monetary support are set to remain broadly neutral, with the authorities focused on shoring up
debt-related imbalances in the real estate sector and at the local government level. Net exports
are expected to make little contribution to growth, as the surge in goods exports induced by the
pandemic dissipates, while imports are set to pick up due to stronger domestic consumption and
outbound tourism. Overall, GDP growth is forecast to rebound from 3% in 2022 to 5.5% in 2023,
before slowing to 4.7% in 2024.
Consumption is set to remain
depressed and exports weak, affected inter alia by the ban on oil and refined products imports into
the EU, as well as by the oil price caps agreed by the EU with the international G7+ Price Cap
Coalition. With the economy gradually adjusting to the sanctions shock, a shallow recovery is
expected in 2024, driven by domestic demand. Lower commodity revenues, mounting structural
headwinds, including continued sanctions, a shrinking labour supply and constrained external
financing are set to weigh negatively on economic activity.
( a ) 2019 2020 2021 2022 2023 2024
2022 2023 2024
Japan
3.8 -0.4 -4.3 2.1
1.0 1.1 1.0
1.7 1.6 1.2
United Kingdom
2.3 1.6 -11.0 7.6
4.1 -0.2 1.0
4.2 -0.9 0.9
United States
15.6 2.3 -2.8 5.9
2.1 1.4 1.0
1.8 0.7 1.7
Emerging and developing Asia
33.7 5.2 -1.1 7.2
4.3 5.2 5.1
4.4 4.8 5.0
- China
18.5 6.0 2.2 8.5
3.0 5.5 4.7
3.4 4.5 4.7
- India
7.3 4.6 -6.0 8.9
6.7 5.6 6.6
6.9 6.0 6.3
Latin America
7.4 -0.1 -7.1 6.9
3.4 1.7 2.1
3.0 1.7 2.2
- Brazil
2.3 1.2 -3.3 5.0
2.9 1.0 1.3
2.5 0.8 1.0
MENA
5.8 1.3 -3.3 4.2
5.3 3.2 3.5
5.4 3.5 3.3
CIS
3.9 2.5 -2.4 5.5
-0.8 0.2 2.0
-6.8 -1.1 3.2
- Russia
2.9 2.2 -2.7 5.6
-2.1 -0.9 1.3
-5.1 -3.2 0.9
Sub-Saharan Africa
3.3 2.6 -2.1 4.3
3.4 3.2 3.3
3.3 3.4 3.7
Candidate Countries
2.5 1.5 0.5 9.5
0.0 3.1 4.3
4.8 3.4 3.0
World excluding EU
85.1 2.9 -2.6 6.3
3.2 3.1 3.3
3.1 2.9 3.4
World excluding EU, import
-0.6 -8.3 11.3 4.8 1.4 3.0 4.8 2.5 3.7
EU export market growth
2.5 -8.4 10.1 6.9 1.4 2.9 6.2 1.9 3.5
Real GDP growth
Trade of goods and services, volumes
(a) Relative weights in %, based on GDP (at constant prices and PPS) in 2022.(b) Imports of goods and services to the various markets (incl. EU-markets) weighted according to
their share in country's exports of goods and services.
Table I.2.1:
International environment
(Annual percentage change)
Spring 2023
Autumn 2022
Forecast
Forecast
Economic outlook for EA and EU
17
(Continued on the next page)
Box I.2.1: European gas market: recent developments and outlook
Security of supply and affordability of natural gas are crucial for the EU economy. Gas
households and industry (both 32% of final energy consumption in 2020). Natural gas is also an
important driver of electricity prices across the EU, as it acts as the marginal production source of
power. Whilst to meet the decarbonisation targets the EU aims to shift to low-carbon gases and reduce
its total gas consumption, natural gas will continue to play an important role in the energy mix in the
coming decade and beyond. For these reasons, the security of supply and affordability of gas remains
a key priority for the EU. Last winter, the EU was able to weather the energy crisis thanks to an effective
diversification of energy supply and a sharp fall in gas consumption, as well as by taking measures to
support the functioning and transparency of price formation in gas markets. The EU is therefore now
in a much better position in terms of its gas supply ahead of the next winter.
The EU diversified its energy supply and tackled bottlenecks in the delivery of LNG gas.
While total gas imports from Russia decreased by 80 billion cubic meters (bcm), and thereby almost
halved in 2022 year-on-year, the EU stepped up its cooperation with other countries to boost gas
imports. In particular, LNG imports from the US more than doubled, to around 50 bcm in 2022. New
floating LNG terminals were made operational in Finland, Germany and the Netherlands. Furthermore,
a record number of more than 56 Giga Watt (GW) wind and solar capacity was installed in the EU in
2022, potentially leading to a reduction of up to 11 bcm of natural gas demand in the power sector.
Gas demand reduction also played a fundamental role. Between August 2022 and March 2023,
households and corporations reduced gas consumption by 18% (or 53 bcm), compared to the 2017-
21 average. This exceeded the objective of the emergency Council Regulation (EU) 2022/1369 setting
a voluntary gas demand reduction target of 15% (or 45 bcm) between August 2022 and March 2023.
The exceptionally high gas prices have been a decisive factor of demand restraint. Wholesale
compared to pre-pandemic levels of around 10- These very high prices reflected the
synchronised surge in demand from Member States in order to refill depleted gas storages ahead of
the winter season, amid fears of shortages in the market due to the unprecedented reduction in Russian
supplies and limited physical capacity to import LNG into the EU.
(1)
The available empirical analysis
suggests that gas demand is relatively inelastic to prices.
(2)
Historically, however, fluctuations in prices
-linear in the
presence of very large price increases, like the ones experienced in 2022. Therefore, part of the gas
demand reduction can be attributed to the price signal.
Industry (excl. power generation) contributed about half of the reduction in gas
consumption, partly through output cuts
(3)
. In the summer months, the overall gas demand
reduction was mostly driven by industry, as manufacturing companies were first to reduce their gas
consumption. Gas demand reductions can be driven by savings (behavioural changes and energy
efficiency), fuel-switching to carbon-intensive and/or clean fuels, and production curtailment. Over the
period 2017-22, total manufacturing output was at its highest level in 2022, showing that high energy
prices have not come at the cost of lower overall production. Still, the output of some energy-intensive
sectors, such as basic metals, chemicals, non-metallic minerals and paper products started to decrease
in the second half of 2022. As gas prices are expected to stabilise at a level significantly below the
peak prices of 2022, one can expect gas demand from energy-intensive industries that reduced
(1)
The analysis builds on European Commission (2023).
gas. Staff Working Document SWD(2023) 63 final.
(2)
Labandeira, X., J. M. Labeaga, and X. López-Otero (2017). A meta-analysis on the price elasticity of energy
demand. Energy policy, 102, 549-568.
(3)
Eurostat currently only reports the sectoral detail in terms of gas consumption annually, with a delay of about
one year, which makes a detailed breakdown between sectors challenging. However, to this end, the JRC
analysed gas consumption in seven Member States between Aug-Dec 2022. The reported figure is therefore
based on estimates by the Commission. The figure is derived from an extrapolation of BE, DE, ES, FR, IT, NL,
and RO, representing 78% of consumed gas in the EU. The International Energy Agency and Bruegel derived
similar conclusions.
European Economic Forecast, Spring 2023
18
Box (continued)
(Continued on the next page)
production or switched to more carbon-intensive fuels (rather than structural energy efficient
investments) to bounce back.
The residential and commercial sectors are estimated to have contributed about half of the
gas demand reduction in the EU, also thanks to milder temperatures. Heating of space
represents, on average, around 63% of the final energy consumed by households in the EU
(4)
; lowering
heating is, thus, an impactful way for households to reduce their energy consumption. As the time span
between August and December 2022 had around 8.3% fewer heating degree days (HDD) compared to
the 2017-21 average, the Commission estimates that of the total gas demand reduction, around one-
sixth was induced by milder weather (i.e. gas demand was 5 bcm or 3.0-3.2% lower)
(5)
. This
contribution was concentrated in October and November.
The marginal decrease in gas consumption in the power sector masks important cross-
country differences. Whereas some Member States switched away from gas (e.g. to coal) for
electricity generation, others saw their gas consumption in the power sector increase significantly. For
example, in Spain, gas-fired electricity generation increased significantly due to a combination of
factors, including the Iberian price cap. The cap specifically limited the price increase of gas used by
power plants and increased export of electricity to France, as France needed to compensate for the
lower availability of nuclear capacity and lower hydro production caused by the drought that hit Europe
in summer 2022.
Initiatives to reduce demand and ensure supply were supported by measures to improve the
functioning and transparency of price formation in the EU gas market. This included the
establishment of a daily LNG price assessment for deliveries to the EU and the market correction
mechanism that sets a temporary price ceiling on derivatives when the TTF month-ahead price spikes
s considerably from international prices. Regarding the LNG price
assessment, it further provides transparency to the market on the price of the actual physical deliveries
of LNG in Europe.
Outlook
Gas storage filling levels reached 61% by early May 2023, significantly above 2022 levels
(37%) and above multi-year average (2016-20 average at 43%). In the summer months of
2022, the gas storage levels caught up with the 2017-21 average and continued increasing thereafter.
With a peak at 95% in November 2022, storage levels exceeded the mandatory filling target of 80%
for 2022
(6)
. Since then, the reduction in storage levels during the winter months remained moderate,
when the drop in storage, especially in January, was small compared to previous years. Moving towards
the winter 2023/24, this should facilitate reaching the 90% gas storage target by 1 November 2023
(7)
.
The EU recently agreed to extend the voluntary 15% gas demand reduction target by
another year (until 31 March 2024)
(8)
. Compliance with the regulation should support the filling of
gas storages, keeping prices down and securing enough energy supplies. If the observed gas demand
reduction is sustained, the Commission baseline scenario estimates that storage levels reach 95 bcm
by the end of October 2023, and thereby will be above the 90% storage target, and 43 bcm by the
end of March 2024, leaving a comfortable level of spare gas left coming out of next winter
(9)
. If,
(4)
Eurostat [nrg_d_hhq].
(5)
European Commission SWD(2023) 63 final. IEA (2023) estimated that gas demand was 18bcm lower due to
the weather in 2022 versus 2021.
(6)
Regulation (EU) 2022/1032.
(7)
Implementing Regulation (EU) 2022/2301.
(8)
Council Regulation (EU) 2023/0087.
(9)
European Commission SWD (2023) 63 final. Assumptions:
Storage levels as of 7 March 2023 (58.5 bcm at the end of 5 March).
Non-Russian pipeline supply equal to the average of the last seven months of 2022.
LNG supply equal to the average of the last seven months of 2022, plus 15 bcm/a (1.25 bcm/month) from Apr.
2023.
No gas from Russia via pipeline.
Average demand of the 2017-2021 period, applying percentage reductions as stated.
Exports to Switzerland as in 2021 (latest data available; 2.2 bcm/a, of which 1/3 in summer and 2/3 in winter).
Exports to Ukraine and Moldova of 0.5 bcm/month.
Economic outlook for EA and EU
19
Prospects for emerging markets other than China remain rather muted, with slower
growth expected in 2023, and only a modest pick-up in 2024. The recent falls in commodity
prices will ease pressures in some (commodity importing) EMEs and low-income economies but
worsen prospects for commodity exporters. Provided that the problems in the US (and Swiss)
banking sectors prove to be isolated and idiosyncratic cases, spillovers to EMEs are likely to be
limited. Growth in India is expected to moderate in 2023, from nearly 7% in 2022, with rising
borrowing costs affecting both manufacturing and consumption. In emerging Asia (excluding
China), the late-2022 downturn in the technology and manufacturing cycle appears to have
extended into early 2023, but the outlook for the rest of the year looks brighter as China reopens.
Growth in Central Asian economies is set to slightly pick up compared to 2022, when it was
negatively affected by spillovers from Russia. In South Africa, recurrent and increasingly larger
electricity supply problems are constraining growth. A combination of high inflation, sharp
monetary policy tightening and lower commodity prices are set to dampen activity in Brazil,
Argentina, and Mexico.
Global growth (including the EU) is expected
to slow from 3.3% in 2022 to 2.8% in 2023,
before rising to 3% in 2024. This is still
somewhat below the average global growth rate
over the period 2010-19 (3.5%). Excluding the EU,
global growth is projected to fall from 3.2% in
2022 to 3.1% in 2023, then rise back to 3.3% in
2024 (see Table I.2.1 and Graph I.2.8). Compared
to the Winter interim Forecast, these projections
are slightly higher for 2023 but marginally lower
for 2024. The advanced economies are expected
to see growth slow from 2.6% in 2022 to 1.3% in
2023, and then grow by 1.5% in 2024. Growth in
EMEs outside of China is also forecast to slow,
from around 4.3% in 2022 to 3.4% in 2023,
before picking up to close to 4% in 2024. The key outlier among emerging markets is China, with
somewhat faster growth expected in 2023 than in 2022, partially offsetting the slower growth in
advanced economies and elsewhere.
The outlook for global trade is equally subdued, with a sharp slowdown expected in
2023 and some recovery in 2024. Global merchandise trade will continue to be influenced by
Box (continued)
however, the EU does not keep the 15% gas demand reduction over the next year (compared to the
2017-21 period), storage levels could decline to rather low levels at the end of winter 2024.
The threat of outright shortages has significantly abated, but the evolution of prices
remains highly uncertain. High gas storage levels and supply diversification have reduced the risk
of renewed stress in European gas markets. Market expectations
(10)
until the end of winter 2023/24
foresee wholesale gas prices stabilising just above 50 , about one-sixth of the peak in 2022,
though still more than twice the pre-crisis levels. Increased demand could, however, reignite price
pressures. This may be triggered by a combination of e.g. a cold winter or hot summer increasing
demand for heating or cooling respectively; lower prices reducing incentives to gas savings and
reversing the gas-to-coal switch in power generation that occurred last year in some countries
increased demand for LNG; and the need to increase gas-fired electricity generation due to low
availability of nuclear capacity and hydropower generation. At the same time, benign weather
conditions and increases in renewable power generation capacity could result in downward pressure
on gas prices, below levels currently suggested by futures contracts.
(10)
ICE Index (2023). Dutch TTF Natural Gas Futures.
2.9
-2.6
6.3
3.2
3.1
3.3
-4
-3
-2
-1
0
1
2
3
4
5
6
7
19 20 21 22 23 24
pps., %
Other emerging and developing (Latin America, MENA and SSA)
Russia, Eastern Neighbourhood and Central Asia
Other emerging and developing Asia
China
Advanced economies excl. EU
World excl. EU (y-o-y %)
forecast
Graph I.2.8: Contributions to global GDP growth (excl. EU)
European Economic Forecast, Spring 2023
20
the rotation of demand back towards services in the advanced economies. While the opening of
China and the continued recovery in tourism is set to have some offsetting effect, the overall
outlook for global trade growth is weak. Moreover, geopolitical tensions are affecting trade policy,
with a growing use of non-tariff trade restrictions. Overall, the pace of growth of total imports is
projected to decline from 5.6% in 2022 to just 1.9% in 2023, before recovering to 3.3% in 2024.
2.2. FINANCIAL CONDITIONS IN THE EU
Since the Winter interim Forecast, financial conditions in the EU have tightened slightly
further amidst persistent volatility in financial markets. After a strong start to the year,
driven by incipient signs of improvements in the macro-financial environment, positive risk
sentiment reversed abruptly in March when the failure of some US small and mid-size banks and
the takeover of troubled Credit Suisse by UBS caused stress in the banking sector. Following some
market turbulences, risk appetite resurfaced in April, leading to higher valuations in equity markets.
rate hikes in response to persistently high core inflation.
In the first months of this year, the ECB has continued the normalisation of its main
monetary policy instruments. The ECB Governing Council raised its policy rates further by 50
bps. on 2 February and by an additional 25 bps. at its latest meeting in early May, after the cut-off
date of the forecast. Since the beginning of the normalisation process, policy rates have increased
by 375 bps., and as of 10 May 2023, the interest rates on the main refinancing operations,
marginal lending facility and deposit facility are at 3.75%, 4.00% and 3.25% respectively. The size
repayments
(
1
)
and maturing of TLTRO III loans. Furthermore, the ECB has also started to reduce its
asset purchase programme (APP) securities portfolio holdings in March 2023 and is expected to
discontinue the reinvestments under APP as of July 2023. However, it remains committed to
continue reinvesting the principal payments from maturing securities purchased under pandemic
emergency purchase programme (PEPP) until at least the end of 2024. At the same time, the ECB
has reaffirmed its commitment to address fragmentation risks and risks for financial stability. In
the aftermath of the market tensions originated in the US, it stressed that it could provide liquidity
if necessary for financial stability purposes, including through new instruments.
Monetary policy normalisation is expected to translate into further increases in short-
term interest rates while long-term rates would remain stable. Reflecting market
expectations at the cut-off date of this forecast, Euribor-3 months futures suggest that euro area
short-term nominal interest rates will increase further and peak at 3.8% in 2023-Q3, somewhat
later and higher than at the cut-off date of the Winter interim Forecast, before gradually easing to
3.0% by the end of the forecast horizon (see Graph I.2.9). Nominal long-term rates in the euro
area, which already increased substantially in 2022, are expected to stay around 2.9% over the
forecast horizon.
Outside the euro area, monetary policy is also on a normalisation course, though with
various levels and profiles of rates (see Graph I.2.10). In central and eastern Europe, where
monetary policy normalisation started earlier, central banks have maintained their monetary policy
stance or have even started to lower rates, notably in Hungary where rates increased most In
Sweden and Denmark, the process of monetary policy normalisation is more aligned to that of the
ECB (see Box I.5.1 for the technical assumptions underpinning interest rates in this forecast).
(
1
)
Since the ECB revised the interest rate calculation on TLTRO III loans in October 2022, banks have made early
repayments of TLTRO III loans amounting to EUR 931bn.
Economic outlook for EA and EU
21
Short-term real rates are set to turn positive in the euro area this year. In real terms
(deflated by the HICP inflation rate), short-term interest rates remain negative. However, in view of
the projected gradual easing of inflation, they are expected to increase steadily and turn positive
at the end of this year
(
2
)
. Long-term rates already turned positive in real terms (i.e. deflated with
the 10-year inflation swap) at the end of 2022-Q3. As markets anticipate long-term inflation
expectations to remain stable in the 2.4%-2.5% bracket, real long-term rates are expected to stay
broadly unchanged at around 0.5% over the forecast horizon (see Graph I.2.11).
The monetary policy outlook has become
more uncertain following the emergence of
financial stability risks and increased
uncertainty around the inflation outlook. This
is reflected by the increased volatility of market
expectations about the future path of policy rates.
At its monetary policy meeting in March, the ECB
Governing Council highlighted its reaction function,
whereby policy rates decisions will be determined
by an assessment of the inflation outlook, the
dynamics of underlying inflation, and the strength
of monetary policy transmission. The latter has
become particularly uncertain following the
market stress surrounding the banking sector in
March. The ECB also stated that there is no trade-
off between price stability and financial stability challenges, which can be addressed separately
and with the most appropriate tools.
Benchmark sovereign yields wavered since the start of the year, tracking monetary
policy expectations. -year sovereign
bond yields higher. However, during the market turmoil in March, bond yields dropped significantly
as markets lowered their expectations for further ECB rate hikes while investors fled into safe
assets. As risk aversion faded, benchmark bond yields resumed their upward trend, reaching in
early May broadly the same levels as at the start of the year. Euro area sovereign bond spreads
over German bunds have remained broadly stable in most Member States while credit default
(
2
)
Short-term rate: 3M Euribor; Long-term rate: 10Y interest rate swap. Real rates are derived from the respective short or
long-term rate minus annual HICP inflation and average future inflation inferred from 10Y inflation swaps, respectively.
Short-term nominal forecasts (derived from forward short-term rates) are deflated by ECFIN inflation forecasts. Long-
term nominal forecasts (derived from forward long-term swap rates) are deflated by their respective forward inflation
swaps (i.e. 1Y 10Y and 2Y 10Y forward inflation swap rates).
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Mar-22 Sep-22 Mar-23 Sep-23 Mar-24 Sep-24
Graph I.2.9: Short-term euro interest rate expectations
at different dates
SF 23 cut-off WiF 23 cut-off AF 22 cut-off
Note: 3 months Euribor, expectations based on future contracts.
Source: IHS Markit, Refinitiv, Bloomberg.
%
-2
0
2
4
6
8
10
12
14
16
18
Mar-22 Sep-22 Mar-23 Sep-23 Mar-24 Sep-24
Graph I.2.10: Short-term interest rate expectations in
non-euro area EU Member States
EA SE DK CZ PL RO HU
Source: IHS Markit, Refinitiv, Bloomberg.
%
-10
-8
-6
-4
-2
0
2
4
6
Jan-08
Jan-10
Jan-12
Jan-14
Jan-16
Jan-18
Jan-20
Jan-22
Jan-24
%
Graph I.2.11: Euro area benchmark interest rates
Short term Long term
Short term (real) Long term (real)
forecast
Source: Euribor, ECB.
European Economic Forecast, Spring 2023
22
swap spreads remained contained. Corporate bond spreads increased in March, in particular in the
high yield segment, but tightened back with the return of risk appetite.
EU stock markets have continued on a
positive trend since the start of the year. The
Europe 600 index has gained some 8% since the
start of the year on the back of better EU
economic prospects, lower gas prices and the re-
opening of China following the COVID-19 lock-
down. Meanwhile the banking sub-index
significantly outperformed on the back of strong
fundamentals and robust profitability, with
improving net interest margins outweighing
expectations of higher provisions from a
deteriorating asset quality outlook. In March,
markets sold off with banking stock particularly
hard hit as the closure of several US banks and
the forced merger of Credit Suisse with UBS led
investors to reassess risks. However, as of end-March, broad stock markets rallied, and the banking
sub-index recovered most of its losses (see Graph I.2.12).
banking and financial system. Regulatory reforms implemented since the global financial crisis
in 2008 have strengthened the resilience of the EU banking system. On average, banks have solid
capital positions, robust asset quality and sufficient liquidity buffers. They also appear to have the
capacity to absorb the impact of a weakening in credit quality and rely upon well-functioning
market infrastructures that have withstood market volatility shocks and declines in asset
valuations. At the same time, EU banks continue benefiting from the normalisation of monetary
policy, as the interest rate pass-through on the asset side exceeds the pass-through on the liability
monetary policy tightens further and TLTROs progressively expire until end-2024.
Bank lending in the euro area continued to decelerate for both firms and households as
interest rates increased (see Graph I.2.13). The annual growth rate of loans to non-financial
corporations (NFCs) declined from 6.3% in December 2022 to 5.2% in March 2023, while the
annual growth rate of loans to households declined from 3.8% to 2.9% over the same period
(
3
)
.
The latest ECB Bank Lending Survey of April 2023, released after the cut-off date of this forecast,
shows continuation of the trends observed in the previous survey round of January 2023, which is
consistent with the observed slowdown in bank lending. Banks continued to report strong
tightening of their credit standards for both firms and households in the first quarter of 2023. The
tightening re
Looking forward to the second quarter of this year, banks expect further tightening, albeit to a
d for loans declined
further in the first quarter of this year, still driven by the high level of interest rates and lower
at its fastest pace from a historical perspective due to high interest rates, poor housing market
prospects and low consumer confidence. Banks expect the demand for loans to continue falling in
the second quarter of this year, but at a less rapid pace.
(
3
)
Loans to households and NFCs adjusted for seasonal effects and for loan sales and securitisation. Data for March
came in after the cut-off date of this forecast.
Source: European Central Bank (ECB) (2023) Monetary developments in the euro area: March 2023 Press Release, 2 May.
95
100
105
110
115
120
125
Jan-2023 Feb-2023 Mar-2023 Apr-2023 May-2023
Graph I.2.12: European stock prices
EuroStoxx 600 Euro Stoxx Banks
Source: STOXX, Ltd.
Index,
1 Jan 23=100
Economic outlook for EA and EU
23
Tighter credit standards and higher interest
rates started to weigh on house prices. Euro
area house prices decelerated to an annual rate of
3.0% in 2022-Q4, down from 9.6% in 2021-Q4.
This slowdown, often from very fast growth rates,
affected EU countries to a varying degree. About
half of the Member States saw stagnating house
prices by the end of 2022, or even a mild decline
such as in the Netherlands, Sweden, Finland and
Germany. Looking forward, house prices in the EU
are expected to broadly stabilise in nominal terms
this year and next amidst persistent cross-country
variations. While the increase in mortgage rates is
set to weigh further on housing demand, housing
supply is expected to remain constrained in most
EU countries, which limits the potential for a
generalised house price slump. Higher mortgage rates are set to have a limited impact on
-rate mortgages, at close to 85%
of the total. However, a number of countries with a large share of floating-rate housing loans, such
as Finland, Portugal, Cyprus and the Baltic states in the euro area and Sweden, Poland, Romania
and Bulgaria in the rest of the EU, may experience a loss in household discretionary income with
possible knock-on effects on consumption.
The euro has regained strength since the beginning of this year. The euro appreciated
against the US dollar, the Chinese renminbi, the Japanese yen, the Australian dollar and the Korean
won, reflecting a tighter-than-previously-expected monetary policy stance in the euro area in the
context of persistently high core inflation, a rising current account surplus as a result of declining
gas prices, and positive surprises regarding the euro area economic activity. At the same time, the
euro depreciated against the Swiss franc and against the currencies of some other EU Member
States (Hungary and Poland).
2.3. ECONOMIC ACTIVITY
In 2022, the EU and euro area economies grew by 3.5%, in line with the projection in the
Winter interim Forecast. Following robust expansion in the first half of the year, by 1.5%
compared to the previous semester, economic activity in the EU slowed down in the second half of
2022, but less than feared. Real GDP expanded at a rate of 0.7% compared to the first half of
2022, dragged down by a marginal contraction in the fourth quarter, by 0.1%, while the euro area
stagnated. The statistical carry-over to 2023 is at 0.3% in the EU and 0.4% in the euro area. In
2022, dispersion of annual growth rates across countries
(
4
)
narrowed significantly compared to
2020, but remained large. Among the six largest Member States, economic activity increased by
1.8% in Germany, 2.6% in France and 3.7% in Italy. More robust growth was recorded in the
Netherlands (4.5%), in Poland (5.1%) and in Spain (5.5%).
(
4
)
As measured by the standard deviation of the annual growth rates of the EU Member States.
-2
0
2
4
6
8
1
2
3
4
Dec-14 Dec-16 Dec-18 Dec-20 Dec-22
Graph I.2.13: Composite Financing Cost Indicator
and credit to the euro area private sector
CFCI of the private sector
Credit to the private sector, annual growth rate (rhs)
Source: ECB, Bloomberg, Datastream.
%
%
European Economic Forecast, Spring 2023
24
At the end of 2022, domestic demand
contracted. In the fourth quarter of last year,
private consumption and investment provided a
negative contribution to growth, more than
offsetting the positive impulse from government
consumption. The contraction of private
consumption, for the first time since early 2021,
was the result of a marked decrease in the
consumption of non-durable goods and a small
drop of expenditure on services, after the strong
increase recorded in the summer. By contrast,
consumption of durable goods increased for the
second quarter in a row, likely benefiting from
easing supply disruptions. The sharp fall in gross
fixed capital formation came on the back of a strong retrenchment of investment activities in
Ireland. Excluding these volatile developments, the quarter-on-quarter decline in the EU was much
more contained (see Graph I.2.14). Still, investment in residential housing fell sizeably, on the back
of tighter financing conditions and significantly increased construction costs. Finally, net trade
contributed positively to GDP growth in the last quarter of 2022, though as a result of sluggish
reflected weakening global
demand, while the fall in import volumes came amid still high energy prices and after sustained
efforts to refill gas storages in the summer. Moreover, like for investment, the aggregate volume
of EU imports was again strongly affected by the activity of multinational companies in Ireland.
(
5
)
The surge in demand from the reopening of services largely faded at the end of last
year. Value added growth in contact-intensive services
(
6
)
contracted significantly in the fourth
quarter of 2022, following the boost provided by the gradual reopening and increased mobility in
the previous three quarters. Weak dynamics in the other sectors did not support overall services.
Value added in agriculture and construction also contracted in the fourth quarter, the latter
continuing to decline since the second quarter. Value added in industry stagnated, showing some
resilience.
The household saving rate edged up again in
the fourth quarter. According to quarterly
sectoral accounts, the household saving rate
increased to 12.6% in the EU (from 12.0% in the
previous quarter) and to 14.2% (from 13.4%) in
the euro area, as households allocated a lower
share of their nominal gross disposable income to
consumption. This halted the continuous decline in
the household saving rate observed since early
2021. Still, in 2022 as a whole, the saving rate
declined further to 13.2% (from 16.7% in 2021) in
the EU and to 14.3% (from 17.9% in 2021) in the
euro area, but remained above the rates recorded
before the pandemic, in 2019. There remains
large heterogeneity in saving rates across
countries (see Graph I.2.15).
(
5
)
the Summer
2022 interim Forecast.
(
6
)
Contact-intensive sectors include arts, entertainment and recreation, as well as wholesale and retail trade, transport,
accommodation and food service activities. These sectors have been particularly affected by containment measures
during the pandemic, as non-teleworkable occupations, reliant on teamwork or face-to-face customer interaction.
70
80
90
100
110
19-Q4
20-Q4
21-Q4
22-Q4
19-Q4
20-Q4
21-Q4
22-Q4
19-Q4
20-Q4
21-Q4
22-Q4
Graph I.2.14: GDP demand-side components,
EU excluding IE
Total Goods
Services Machinery, equipment, others
Construction
Private
consumption
Investment
Exports
Index,
2019-Q4 = 100
0
5
10
15
20
25
PLHRLT CYLVSK EE PT FI ES SI IT BEHUATDKNLSE FR CZLUDE IE
Note: Excluding BG, MT, RO and EL.
Graph I.2.15: Saving rates in 2022
%
EU
Economic outlook for EA and EU
25
Box I.2.2: Recent developments in bankruptcy declarations in the EU
This box analyses the drivers behind the surge in bankruptcies in the second half of 2022.
The recent surge in bankruptcies is to a large extent driven by developments in Spain, where a new
insolvency regulation recently entered into force. Sectors that were most severely hit by the pandemic
and energy crisis, notably accommodation and transport, also played an important role in the recent
uptick, but likely reflect a catch-up with pre-pandemic trends following the withdrawal of support
measures. Beyond these two effects, the increase in bankruptcy declarations in the EU appears
contained. Still, the rapid tightening of financing conditions remains a source of risk.
Bankruptcy declarations surged in the second half of last year and are now above their
long-term average in the EU. Business registrations in the EU had shown a steady increase before
2019. In the first half of 2020, registrations dropped reflecting the difficult situation of businesses at
the beginning of the pandemic. They picked up again as the economy rebounded in 2020-Q3. Since
then, the number of registrations has returned to a level well-above the pre-pandemic average (2015-
19). The drop of bankruptcies during the first half of 2020 reflected the interruption of administrative
services to handle bankruptcy declarations, including outright suspensions of possibility to initiate
insolvency proceeding. Bankruptcy declarations picked up again until the beginning of 2021 and
remained stable at a relatively low level until 2022-Q2, but have increased sharply thereafter. Two
factors explain this sudden surge.
The increase in the bankruptcy rate in the EU is heavily affected by regulatory changes in
Spain. Bankruptcy declarations in Spain shot up in the last two quarters. This is largely explained by
reforms to the insolvency framework that entered into force in September 2022, which shortened the
repayment plan and made bankruptcy proceedings more debtor-friendly. In addition, the end of the
insolvency moratorium as from 30 June 2022 contributed to increase the insolvency filings in the third
quarter of 2022. As Spain boasts the third highest number of corporations in the EU, developments in
Spain have an important weight in the EU aggregate. Several other Member States registered a slight
uptick in bankruptcies, but the rate of exits remained below the pre-pandemic average.
The hike in bankruptcies is concentrated in the sectors most likely to be affected by the
withdrawal of pandemic support measures. The pick-up in bankruptcies reflects a clearing of the
insolvency backlog created by some support schemes during the pandemic. Government liquidity
support measures in the acute phases of the pandemic helped many businesses, including those that
were already struggling, to stay afloat. Businesses in contact-intensive sectors, like accommodation
and transport, have been amongst the main beneficiaries, as contact-intensive services were
particularly hit by lockdowns. As support measures are wound down, the number of viable firms is
expected to thin out. In this respect, it is noteworthy that in the fourth quarter of 2022, bankruptcy
declarations in the transport and accommodation sectors (which incidentally have historically shown
higher average bankruptcy rates than other sectors) jumped to record highs (by 72.2% and by 39.4%
respectively). These two sectors are also of significant importance in Spain and contribute to the strong
increase of bankruptcies in the country.
50
100
150
200
250
15-Q1 16-Q1 17-Q1 18-Q1 19-Q1 20-Q1 21-Q1 22-Q1
Graph 1b: Bankruptcy declarations per sector, EU
Industry Retail
Transportation Accommodation
Index,
2015=100
50
60
70
80
90
100
110
120
130
15-Q1 16-Q1 17-Q1 18-Q1 19-Q1 20-Q1 21-Q1 22-Q1
Graph 1a: Business registrations and bankruptcies, EU
Registrations Bankruptcies
Average 15-19 Bankruptcies EUexES
Average 15-19
Index,
2015=100
European Economic Forecast, Spring 2023
26
EU economic activity expanded at the start of 2023. Lower energy prices and easing
inflationary pressures, coupled with improved business and consumer confidence, supported
flash estimate, in 2023-Q1 GDP grew by 0.3% in the EU and by 0.1% in the euro area, which is
implies that growth for 2023 as a whole would be at 0.5% in the EU and 0.6% in the euro area if
economic activity were to be flat in the remaining quarters. Among the reporting countries,
estimates ranged from 3% q-o-q (Lithuania) to 1.6% (Portugal). In the largest euro area
countries, economic activity increased by 0.5% both in Spain and in Italy, and by 0.2% in France,
while it stagnated in Germany. Information on the demand composition of growth is only available
from national sources for a few countries. It points to subdued consumption growth and robust
investment growth, despite tighter financing conditions. Net exports are again expected to
contribute positively to growth, thanks to the improvement in the terms of trade and a strong
tourism performance.
The positive growth reading in the first
quarter was corroborated by short-term
indicators. Industrial production recorded a
positive start of the year. In the first two months,
it stood 1.2% q-o-q above the 2022-Q4 average.
Fading supply chain bottlenecks and lower energy
costs supported the improvement. However, the
energy shock continued to weigh on energy-
intensive manufacturing sectors, which were still
trending downwards. Production in construction
also continued to increase in January and
February, likely helped by mild weather conditions.
By contrast, the volume of retail sales continued
to contract in the first months of the year,
remaining 0.4% below the 2022-Q4 level on
average (see Graph I.2.16). Similarly, new car passenger registrations declined in the first quarter
of 2023, reflecting the full or partial reversal of government incentives for the purchase of clean
and energy efficient vehicles in some EU countries. Latest data on trade of goods in volume
pointed to an uptick in early 2023, following a deterioration in both imports and exports at the turn
of the year. Finally, recent indicators signal robust growth in the tourism sector. The number of
significantly in January and February compared to the same period of the previous year, and latest
data from the European aviation on air traffic show flights in March were 88% above the March
2019 levels.
Leading indicators suggest continued
expansion in the second quarter of 2023. In
April, both the Com
the PMIs pointed to confidence in services
outperforming the manufacturing sector. The
sentiment in retail trade and to continued recovery
historical low point (see Graph I.2.17).
Furthermore, the share of industry managers
identifying shortages of material and/or
equipment as a factor limiting their production
decreased further (to 26.8%), as did the
percentage of managers identifying shortage of
labour force (to 26.3%), although staying close to
the all-time high registered a year ago. Meanwhile, slowing demand has taken over as the main
65
75
85
95
105
115
Feb-20 Aug-20 Feb-21 Aug-21 Feb-22 Aug-22 Feb-23
Graph I.2.16: Short-term indicators, EU
Production in construction Retail trade
Industrial production Manuf. - energy intensive
Manuf. - non-energy intensive
Index,
Feb-2020=100
Note: Energy intensive sectors defined as having energy intensity
above the average in manufacturing. For exact definition see
European Economic Forecast, Spring 2022, Box I.2.2.
-20
-15
-10
-5
0
5
10
Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
Graph I.2.17: ESI - consumer survey results, EU
Intentions to make major purchases
General economic situation over the next 12 months
Financial situation over the next 12 months
Financial situation over the last 12 months
Consumer confidence
Note: All series are mean-adjusted and the four components have
the same weight (0.25 each).
Economic outlook for EA and EU
27
factor limiting production. Financial constraints stayed low compared to the other limiting factors,
ed further
consumers as to their future financial situation edged down.
The bi-annual Commission investment survey, conducted between March and April,
provides a mildly positive picture for business investment. In both manufacturing and
services, the balance of managers expecting higher, rather than lower, investment by their
companies this year compared to 2022 remains high and positive, despite its slight decrease
compared to the same balance last year. This means that while the outlook for investment growth
in 2023 remains positive, investment dynamics can be expected to decelerate. At the same time,
t intentions in both
manufacturing and services as compared to the previous survey of October/November 2022.
The terms-of-trade countershock is making its way through the economy. The sharp
deterioration of terms of trade in 2021 and 2022, as energy (imported) prices surged, resulted in a
transfer of purchasing power from the EU to the rest of the world. In cumulative terms over 2021-
2022, the loss of income accrued to the EU economy is estimated at around 3% of GDP. With
energy prices rapidly falling, the projected improvement in terms of trade over the forecast horizon
is estimated to undo around half of that loss. As falling energy prices gradually feed through to
production costs and consumer prices, all domestic sectors of the economy households,
corporates and governments are set to benefit. So far, households and the public finances have
taken a large part of the brunt of high imported inflation, as employment growth only partially
offset the fall in real wages and the public finances set out to protect households and corporations
from the adverse impact of high energy prices. Companies have been generally successful in
passing on higher production costs to consumers (see Box I.2.3), both domestic and global, though
the most energy-intensive sectors and companies have been struggling. Going forward, households
are set to see their real disposable incomes cease declining in 2023 and finally increase in 2024,
thanks to a combination of falling inflation and higher wages. Falling energy prices will also allow
governments to contain the cost of support measures or phase them out altogether. Corporates
will maintain overall healthy balance sheets over the forecast horizon.
EU GDP growth is projected to slow down
significantly in 2023 and regain some
strength in 2024. Continued resilience in the
labour market and markedly lower energy prices,
roughly back to their 2021 levels, continue to
work their way through the economy, offsetting
the negative impact of tightening financial
conditions. EU economic activity is projected to
expand by 1% (1.1% in the euro area) in 2023.
The 0.2 pps. upward revision compared to the
Winter interim Forecast in both areas owes to the
better-than-expected estimated outturn in the
first quarter of the year. Annual GDP growth in
2024 is projected to land at 1.7% in the EU and
1.6% in the euro area. This is 0.1 pps. higher than
in the Winter interim Forecast for the EU and the euro area. In both years, domestic demand and
net exports are set to provide positive contributions to growth (see Graph I.2.18).
-8
-6
-4
-2
0
2
4
6
8
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Graph I.2.18: Real GDP growth and its contributions,
EU
Private consumption Public consumption
Gross fixed capital formation Changes in inventories
Net exports GDP
y-o-y %,
pps.
forecast
European Economic Forecast, Spring 2023
28
Private consumption remains subdued in
2023, but rebounds in 2024. Continued erosion
standards are holding consumption back (the
latter particularly in Member States where
variable mortgage interest rates prevail see
Section 2.2 - and/or households rely heavily on
consumer credit). Following the fall in the fourth
quarter of last year and projected weakness in the
first quarter of this year, private consumption
growth in the EU in 2023 is projected at a modest
0.5%.
budgets, employment continues to expand and
wages accelerate, growth of real disposable
income of households is set to gain strength in 2024 (see Graph I.2.19), leading to a rebound in
private consumption by 1.8% in 2024.
The household saving rate is expected to decrease slightly further in the EU from 13.2%
in 2022 to 13.1% in 2023 and 12.8% in 2024, close to the rate recorded before the pandemic
(12.2% in 2019-Q4) and to its long-term average (12.8% in the EU). As household investment is
projected to significantly slow down, households remain net lenders to the economy, though their
net lending position declines.
2017 2018 2019 2020 2021 2022 2023 2024
bn Euro Curr. prices % GDP
8,365.3 52.3 2.2 1.9 1.5 -7.1 4.0 4.0 0.5 1.8
3,415.1 21.4 1.1 1.2 1.9 1.0 4.2 1.1 0.7 0.8
3,635.8 22.7 4.0 3.6 6.5 -5.4 3.8 4.0 0.9 2.1
329.2 2.1 0.8 1.0 0.7 0.4 1.3 2.0 1.4 1.2
8,952.7 56.0 5.8 3.7 3.1 -8.4 10.5 7.1 3.0 3.3
24,695.9 154.4 3.7 2.7 2.7 -6.4 6.5 4.9 1.4 2.2
8,704.3 54.4 5.5 4.2 4.6 -7.9 9.1 7.9 2.1 3.2
15,989.8 100.0 2.8 2.1 1.8 -5.6 5.4 3.5 1.0 1.7
15,803.0 98.8 2.9 2.3 1.7 -5.9 6.0 3.0 0.9 1.7
13,399.9 83.8 2.6 1.8 1.6 -6.1 5.4 3.5 1.1 1.6
1.2 1.0 0.8 -3.8 2.1 2.1 0.3 0.9
0.2 0.2 0.4 0.2 0.9 0.2 0.1 0.2
0.8 0.7 1.4 -1.2 0.8 0.9 0.2 0.5
0.3 0.1 -0.2 -0.4 0.6 0.5 -0.2 -0.1
2.7 1.8 1.5 -4.2 4.9 3.6 1.7 1.8
5.2 3.9 3.9 -9.3 9.3 7.2 2.1 3.3
-2.3 -1.9 -2.1 3.6 -3.9 -3.7 -1.1 -1.6
0.3 -0.1 -0.6 -0.5 1.0 -0.1 0.6 0.2
p.m. GDP euro area
Final demand
Imports (minus)
Net exports
Contribution to change in GDP
Private consumption
Public consumption
Investment
Inventories
Exports
GNI
Exports of goods and services
Table I.2.2:
Composition of growth, EU
(Real annual percentage change)
Spring 2023
Forecast
2022
Real percentage change
Private consumption
Public consumption
Gross fixed capital formation
Change in stocks as % of GDP
Final demand
Imports of goods and services
GDP
-6
-4
-2
0
2
4
2019 2020 2021 2022 2023 2024
Employees
Compensation per employee
Non-labour income
Direct taxes, social contributions and transfers
Gross disposable income
forecast
pps., %
Graph I.2.19: Real gross disposable income and
components, EU
Economic outlook for EA and EU
29
(Continued on the next page)
Box I.2.3: Profit margins and their role in euro area inflation
The surge in euro area inflation since mid-2021 was mainly the consequence of the rapid
rise of energy and commodity prices, but the role of domestic factors has been growing. The
deterioration in the terms of trade following the pandemic and the energy and food commodity price
consumer inflation was largely imported. However, core inflation has been rising steeply since mid-
2021, reaching an annual rate of 7.4% in the first quarter of 2023, a historic high.
This box offers insights into how profits have contributed to domestic price formation in
the euro area during the past three years and what this could imply for inflation
developments. When looking at domestic price pressures, attention commonly focuses on
developments in unit labour costs, but unit profits also play a role. They can either constitute a direct
driver of inflation or a cushion, depending on the extent to which firms pass on changes in costs to
final consumer prices. This analysis on the factors behind the increase in domestic prices is based on
national accounts data, and in particular the decomposition of the annual changes in the GDP deflator.
The latter, calculated as the ratio of the nominal value of goods and services produced domestically
to their volume, reflects the price of a unit of production and can be seen as a measure of domestic
price pressures, thus primarily affecting core consumption items. The link between the GDP deflator
and core inflation, i.e. headline inflation excluding energy and unprocessed food, is strong (Graph 1).
The income approach to calculate GDP allows to break the GDP deflator down into labour
costs, profits and taxes, thus showing the role of each of these domestic factors in shaping
domestic price pressures. Some important qualifiers are necessary, however. This analysis is purely
an accounting exercise that does not reveal the uses that firms make of their higher operating
surpluses. While they may indeed distribute some of it to their shareholders, firms may have other
motives to raise their profit margins, including precautionary ones, for example in view of possible
future investment, tax or wage increases. Moreover, causality may be difficult to ascertain at this stage
as the economy is still adjusting to the pandemic and energy shocks, and fiscal support distorted the
normal evolution of certain components due to subsidies and other policy interventions.
Unit profits have been resilient since the outbreak of the pandemic and have become a
significant driver of the GDP deflator. Unit profits, which measure the average profit per unit of
output
(1)
, have fared relatively well since the outbreak of the pandemic (Graph 2). In the initial recession
phase induced by the pandemic shock, both unit labour costs and, to a lesser extent, unit profits,
increased, as compensation of employees and aggregate profits contracted less than real GDP due to
(1)
Unit profits are calculated as the ratio of gross operating surplus to real GDP. Gross operating surplus is
adjusted to exclude the compensation of self-employed persons, calculated on the assumption that their
individual compensation is equal to that of an employed person. Compensation of employees is adjusted
accordingly.
-10
-5
0
5
10
15
20
25
-2
0
2
4
6
8
10
12
19-Q1 20-Q1 21-Q1 22-Q1 23-Q1
Graph 1: Imported and domestic price pressures, euro area
Headline inflation Core inflation
GDP deflator Import deflator (rhs)
y-o-y %
change
y-o-y %
change
Note: Last observation for deflators is Q4 2022.
-3
-2
-1
0
1
2
3
4
5
6
7
19-Q1 20-Q1 21-Q1 22-Q1
Graph 2: GDP deflator and its contributions
Unit profits Unit labour costs
Unit taxes GDP deflator
y-o-y % change,
pps.
European Economic Forecast, Spring 2023
30
Box (continued)
(Continued on the next page)
unprecedent government support. Government support is reflected in the negative contribution of unit
taxes, which dampened the impact of the increase in unit labour costs and profits on domestic prices.
This pattern extended until early 2021, when job retention schemes for workers started to be phased
out and (imported) energy prices began to soar. In 2022, unit profits increased steadily, growing at a
record 9.3% (year-on-year) in the final quarter (Graph 3). This increase contributed 3.2 pps. to the total
GDP deflator growth of 5.8%, thus contributing more to domestic inflation than unit labour costs. A
corollary of the strong increase in unit profits is the shift in the distribution of value added among
firms and labour, whereby the profit share has risen above its pre-pandemic average, while the labour
income share analogously fell (Graph 4).
Unit profits have increased across all euro area countries and sectors, albeit in a
heterogeneous way. The surge in inflation differentials within the euro area is also visible when
looking at the changes in the GDP deflator and unit profits (Graph 5). In 2022-Q4, unit profits grew in
all countries, outpacing the GDP deflator in most of them. In terms of sectoral decomposition, profit
increases during the early stages of the pandemic were led by industry, including manufacturing,
energy and utilities, and mining, but the sector contribution broadened thereafter.
The strength of demand and the high inflation environment have been conducive to higher
profit margins. In theory, a profit-maximising firm sets prices such that the percentage mark-up of
price above marginal cost is inversely related to its price elasticity of demand, i.e. if demand is inelastic,
a firm can afford to have a higher mark-up because demand will react less. The mark-up that a firm
can charge will ultimately depend on the degree of competition and structure of the market it operates
emand. The rapid recovery of aggregate demand in the
aftermath of the COVID-19 crisis, facilitated by high household savings and strong corporate balance
sheets, provided scope for the build-up of unit profits, especially in sectors where pent-up demand
exceeded supply such as in the electronics, health, transport and travel sectors. The initial rotation of
-15
-10
-5
0
5
10
15
05-Q1 08-Q1 11-Q1 14-Q1 17-Q1 20-Q1
Graph 3: Unit profits, unit labour costs, labour productivity
and GDP
Real GDP Labour productivity
Unit profits Unit labour costs
y-o-y % change
58
59
60
61
62
63
64
36
37
38
39
40
41
05-Q1
07-Q1
09-Q1
11-Q1
13-Q1
15-Q1
17-Q1
19-Q1
21-Q1
Graph 4: Profit and labour shares
Profit share, lhs Labour share, rhs
% of GDP net of
taxes
% of GDP net of
taxes
Note: The labour share includes self-employed persons on the assumption
that their individual compensation is equal to that of an employed person.
Net taxes are excluded, i.e. both shares add to 100.
-4
-2
0
2
4
6
8
10
19-Q1 19-Q4 20-Q3 21-Q2 22-Q1 22-Q4
Graph 6: Unit profits and sectoral contributions
Agriculture Industry (excl construction)
Construction Services
Unit profits
y-o-y % change
Note: Analysis based on sectoral accounts. Unit profit growth is calculated
based on sectoral value added (i.e. profits=value added-compensation of
employees).
BE
DE
EE
IE
EL
ES
FR
HR
IT
CY
LV
LT
LU
MT
NL
AT
PT
SI
SK
FI
0
5
10
15
20
25
0 5 10 15 20 25
Unit profits (
y-o-y % change)
GDP deflator (y-o-y % change)
Graph 5: GDP deflator vs unit profits
Note: Data refer to 2022-Q4. The dashed line is the identity (45 degree)
line.
Economic outlook for EA and EU
31
Box (continued)
demand towards goods, amid lockdowns and severe mobility restrictions, enabled firms in the
manufacturing sector to raise their mark-ups (Graph 6). The services sector benefited most when
restrictions were lifted in 2022. The energy sector benefited in aggregate from rising natural gas
prices.
(2)
another explanation for simultaneous increases in profit margins in an environment of accelerating
inflation.
(3)
customers of price increases, as they may be less inclined to view them as idiosyncratic increases and
ng to a competitor. Also, supply shortages for
many goods and commodities, caused by lockdowns and the war, may have raised the pricing power
of their producers.
(4)
Profit developments matter for second round effects and have implications for risks to the
inflation profile. The purchasing power loss that workers have experienced as inflation started to
rise has led to higher wage demands. Changes in the profit share in principle allows firms to
compensate for higher wages and as such could limit the extent of second round effects, i.e. the
prolongation of price shocks through higher wages and demand. This is what happened in the recession
of 2008 when unit profits turned negative. In the wake of the terms-of-trade shock, the extent to which
this pattern is repeated will depend on how value added is shared between firms and workers. If the
profit share does not adjust, any wage increase going beyond productivity gains will ultimately lead to
higher inflation. Protracted distributional conflicts could delay the process of disinflation, risk a
loosening of inflation expectations, and ultimately force central banks to tighten monetary policy more
than otherwise would be the case.
(5)
In the Spring Forecast, the contribution of unit profits to domestic price pressures in the
euro area (and other EU countries) is expected to remain high in 2023 but to decline notably
in 2024. Unit profits in the euro area (EU) are projected to contribute 2.6 pps. (2.5) to the GDP deflator
in 2023, and to fall to 0.1 pps. (0.4) in 2024. Likewise, in line with recent wage agreements, the
projected wage growth is expected to keep unit labour costs high in 2023 with some moderation in
2024. The easing of supply-side bottlenecks, the phasing out of fiscal support, the exhaustion of the
excess private savings accumulated during the pandemic, and weak global economic activity may imply
a return to the patterns observed before the pandemic, when unit profits traditionally played a buffer
role for unit labour cost increases, as firms attempt to maintain market shares. This would represent
a safeguard against risks of prolonged second-round effects.
(2)
Rising gas prices have implied rising profits
marginal pricing model for electricity implies that the cheapest energy generators are deployed first, with more
expensive sources added depending on demand.
(3)
Andler, M. and A. Kovner (2022). Do Corporate Profits Increase when inflation increases? Liberty Street
Economics (NY Fed), 13 July.
(4)
For recent evidence for the US, see Weber, I. and E. Wasner (2023).
can Large Firms Hike Prices in an Emergency? Economics Department Working Paper Series, University of
Massachusetts Amherst.
(5)
Arce, O. et al. (2023). How tit-for-tat inflation can make everyone poorer ECB blog, 30 March.
European Economic Forecast, Spring 2023
32
Tightening financing conditions weigh on
investment, but countervailing factors are at
play. Business investment is projected to
increase, though at a slower pace than last year,
sheet position. By contrast, housing investment,
which is particularly sensitive to interest rates, is
expected to contract, dragging down the whole
construction component of investment.
Construction investment growth is thus expected
to decline by 1.0% in 2023, before rebounding in
2024, by 1.2%. Continued RRF implementation is
also set to continue supporting investment, both
public and private. Overall, investment growth is
projected to decelerate markedly from 4% in 2022 to 0.9% in 2023. Gradual normalisation of
economic activity is e
investment growth up by 2.1% in 2024 (see Graph I.2.20).
The outlook for external demand facing the EU is muted. The projections for EU export
market growth (see Section 2.1) imply a strong slowdown in 2023, followed by some pick-up in
2024. In line with these developments, volumes of both exports and imports of goods and services
in the EU are forecast to decelerate strongly in 2023 compared to 2022, to 3.0% and 2.1%,
respectively, and to only slightly accelerate in 2024. Net external demand is expected to contribute
positively to GDP in 2023 (0.6 pps.). In 2024, stronger import growth is expected to lower the
contribution of external demand to 0.2 pps..
The EU economy is estimated to converge to its potential level of activity by 2024. The
output gap is assumed to virtually close this year and
stabilise next year (see Special Issue I.4.1).
2017 2018 2019 2020 2021 2022 2023 2024
bn Euro Curr. prices % GDP
7,042.0 52.6 1.8 1.5 1.4 -7.7 3.7 4.3 0.6 1.7
2,881.6 21.5 1.1 1.0 1.7 1.0 4.3 1.3 0.7 0.7
3,039.2 22.7 3.9 3.1 6.9 -6.2 3.9 3.7 1.0 2.1
227.4 1.7 0.7 0.9 0.7 0.4 1.0 1.7 1.2 1.0
7,339.0 54.8 5.6 3.6 2.9 -9.0 10.7 7.0 3.1 3.3
20,529.1 153.2 3.4 2.4 2.6 -6.8 6.3 4.9 1.5 2.1
7,126.3 53.2 5.2 3.9 4.8 -8.5 8.4 8.0 2.3 3.2
13,399.9 100.0 2.6 1.8 1.6 -6.1 5.4 3.5 1.1 1.6
13,417.5 100.1 2.6 2.1 1.4 -6.4 6.0 2.8 1.1 1.5
15,989.8 119.3 2.8 2.1 1.8 -5.6 5.4 3.5 1.0 1.7
1.0 0.8 0.7 -4.1 1.9 2.2 0.3 0.9
0.2 0.2 0.4 0.2 1.0 0.3 0.2 0.1
0.8 0.6 1.4 -1.4 0.9 0.8 0.2 0.5
0.3 0.1 -0.2 -0.3 0.3 0.3 -0.1 -0.1
2.6 1.7 1.4 -4.3 4.8 3.5 1.7 1.8
4.8 3.4 3.7 -9.9 8.9 7.1 2.3 3.2
-2.2 -1.7 -2.1 3.8 -3.5 -3.6 -1.2 -1.6
0.4 0.0 -0.7 -0.5 1.3 -0.2 0.5 0.2
Private consumption
Public consumption
Investment
Inventories
Exports
Final demand
Imports (minus)
Net exports
Contribution to change in GDP
Real percentage change
Private consumption
Public consumption
Gross fixed capital formation
Change in stocks as % of GDP
Exports of goods and services
Final demand
Imports of goods and services
GDP
GNI
p.m. GDP EU
2022
Table I.2.3:
Composition of growth, euro area
(Real annual percentage change)
Spring 2023
Forecast
-2
-1
0
1
2
-7
-5
-3
-1
1
3
5
7
19 20 21 22 23 24 19 20 21 22 23 24
difference
from 2019
in pps.
%, pps.
Graph I.2.20: Investment breakdown and investment
rates since 2019, EU excluding IE
Other assets Equipment Construction
GFCF Public inv. Private inv.
Investment total
GFCF growth by asset
Investment-GDP ratio
(rhs)
Economic outlook for EA and EU
33
At the end of 2024, the EU economy is set to
be on a higher real GDP growth path than
previously projected. Following the two
successive large shocks of the pandemic and the
war, the volume of output in the EU by end 2024
is expected to be almost 6% above the pre-
pandemic (2019-Q4) level and around 5% above
the pre-war level (2021-Q4). Moreover, the
volume of output in the EU at 2024-Q4 is set to
be 1.3% above the Autumn 2022 Forecast
projections (see Graph I.2.21). However, the
current forecast does not expect a narrowing of
the gap with the pre-war trend output over the
forecast horizon. It is set to remain almost 2%
below the output that was projected before the
Russian war of aggression against Ukraine (in the Winter 2022 interim Forecast).
(
7
)
Heterogeneity in the growth performance
across Member States remains large. The
extraordinary succession of two large shocks, their
different impact across countries and the variety
of policy responses led to a widening of growth
rates across Member States. The difference
between the highest and lowest growth rate is still
set to remain wide at the end of the forecast
horizon (see Graph I.2.22). However, economic
convergence within the EU measured in terms of
GDP per capita is expected to continue over the
forecast horizon.
2.4. LABOUR MARKET
In 2022, record low unemployment and other key metrics underscored a record tight
labour market. In the fourth quarter of 2022, the EU labour market hit new records across
several key metrics. According to the Labour Force Survey and looking at the age group 15-74, an
unprecedented 203.1 million people, or 61% of the population, were holding a job, while the
unemployment rate and the labour market slack indicator
(
8
)
were at their record lows of 6.1% of
the active population and 12.1% of the extended labour force, respectively. At 65%, the activity
elevated levels, despite some recent declines.
Employment gaps by age, gender and education narrowed in 2022. In the first year of the
pandemic, the employment rate of young persons (15-24) had dropped significantly more than
that of older cohorts, opening the gap in employment rates (based on quarterly labour force survey
data). This gap remained largely unchanged in 2021, but it closed compared to middle aged
workers and narrowed strongly compared to older workers in 2022. Following a stronger decline in
2020, employment of women increased more strongly than that of men in both 2021 and 2022,
leading to a narrowing of the gender employment gap to 10.7 pps., its lowest level on record.
(
7
)
This is computed on the extrapolation of growth outlook from WiF22 based on the extension of GDP volumes with the
average growth rate from 2010-2019.
(
8
)
This indicator measures unmet demand for work and consists of the unemployed, underemployed part-time workers,
and those available for work but not seeking work, as well as of those actively seeking work but not available to take
up work.
85
90
95
100
105
110
18 19 20 21 22 23 24
-15
-10
-5
0
5
10
15
Graph I.2.21: Real GDP growth path, EU
GDP growth rate SF23 (rhs) GDP volumes WiF22
GDP volumes AF22 GDP volumes SF23
q-o-q
% change
Index,
2019-Q4=100
current
forecast
period
85
90
95
100
105
110
115
22-Q1 22-Q3 23-Q1 23-Q3 24-Q1 24-Q3
Graph I.2.22: Cumulative growth performance -
distribution across Member States
Interquartile range Max Median Min EU average
Index,
2021-Q4=100
European Economic Forecast, Spring 2023
34
(Continued on the next page)
Box I.2.4: Which Factors Shape Growth and Inflation Going Forward? Model-Based Insights
into the Spring Forecast
Understanding the drivers of growth and inflation in the EU is key for interpreting an
Economic Forecast. The judgement-based approach underpinning the European Economic Forecast
can be complemented by an analysis of the fundamental forces behind short-term macroeconomic
-
explain it in a model-consistent way. Hence, the analysis
offers a stylised yet quantitative interpretation of the forecast.
The model-based analysis presented in this box points to the continued role of terms of
trade and supply conditions in shaping the economic outlook in the EU. After a still sizeable
impact of past increases in energy prices on inflation and growth in 2023, forecasts of GDP growth
and inflation gradually revert to their long-run trends in 2024. In this regard, this model-based analysis
illustrates the importance of labour market dynamics and the pass-through of energy price
(dis)inflation for the economic outlook. Moreover, there are other drivers, such as the increase in the
price of processed food, which the model only partially captures.
The analysis employs an estimated structural macroeconomic model to shed light on the
key factors driving
inflation. The Global Multi-Country (GM) model is an estimated multi-country Dynamic Stochastic
General Equilibrium (DSGE) model of the euro area. It draws upon a rich data set of over 30 different
time series, including, among others, national accounts variables, and trade flows. The model has been
recently enriched to take into account key developments in the energy market. The model parameters
are estimated with Bayesian techniques based on historical data. The series are extended with forecast
variables to cover the period until 2024.
The model allows quantifying the impact of changes in external assumptions and shocks
that, conditional on historical information, are most likely to drive the short-term dynamics.
The model applies the same external assumptions specified in the forecast. In particular, for energy, it
relies on expectations of gas and oil prices based on futures markets, following the assumptions
outlined in Box I.5.1. The explicit modelling of external assumptions allows to assess the impact of
changes in the assumed path of energy prices, interest rates and external demand on forecast
variables. Moreover, by comparing historical data extended with forecasts with the corresponding
model variables, it is possible to identify the exogenous factors (shocks) that are likely to drive
economic short- and medium-term dynamics, according to the model estimates.
(1)
The stagflationary impact of the surge in
energy prices in 2021 and especially 2022
continues to play out in 2023. As shown in Graph
1, these shocks (yellow bars) remain an important
driver of inflation in 2023 after explaining the bulk
of the 2022 inflation spike.
(2)
According to model
estimates, higher energy prices will continue to drag
on economic activity in 2023, while the positive
effect of falling energy prices will push up GDP
growth only as 2024 (Graph 2). This is because the
negative contribution of energy price shocks includes
second-round effects via, e.g. core inflation and
labour markets that persist even as the initial
(1)
The model identifies the driving forces and transmission mechanisms using theory-based restrictions across
variables and over time. In particular, the ability of the model to fit the observed data determines the size of
the various domestic and foreign demand and supply shocks.
(2)
In Graphs 1 and 2, stacked coloured bars represent contributions of groups of shocks to deviations of growth
and inflation from long-term trends, indicated by dashed bold horizontal lines in both panels. Bars above (below)
this line indicate positive (negative) contributions.
-3%
-1%
2%
5%
7%
10%
2019 2020 2021 2022 2023 2024
Graph 1: Euro area consumption deflator growth, deviations
from trend
Energy price shocks Domestic productivity shocks
Labour, goods market shocks Dom. demand, lockdown shocks
Exchange, interest rate shocks External shocks
Others Inflation (data)
Economic outlook for EA and EU
35
In general, employment losses and gains since the pandemic have been strongly related to
education levels. The educational attainment gap closed somewhat in 2022, as employment of
Box (continued)
commodity shock is progressively reversed. Other shocks from the external environment (e.g. non-
commodity import price and trade shocks) contribute positively to inflation in 2024, while their effect
on GDP growth remains more limited, as indicated by the light blue bars.
Additional inflationary pressures over the forecast horizon come from domestic supply
factors, while the impact of shocks to wage dynamics has remained more limited. Productivity
shocks (red bars) capture broad price-increasing supply-side deteriorations. These add to inflationary
pressures coming from energy. Moreover, inflationary shocks to goods market conditions are consistent
with the observation of increased profit margins. Nominal wages, in contrast, have only partially
recovered the fall in purchasing power especially in 2022. In sum, shocks affecting labour and goods
markets (purple bars) have inflation. Regarding GDP growth,
the joint contribution of both groups of shocks (i.e. productivity and labour and good market) is most
negative in 2022 and eases over the forecast horizon until it turns positive in 2024.
Pent-up demand, further propped up by
government subsidies, is key in explaining the
resilience of the EU economy in 2022 and 2023.
In the early stages of the pandemic crisis, lockdowns
led to a strong demand contraction and drove up
savings. The release of excess savings propped up
demand in 2021 and especially in 2022. Domestic
demand and (reverting) lockdown shocks, however,
continue to push consumption above its model-
implied level also in 2023, possibly reflecting the
positive impact of energy-related fiscal measures.
It is interesting to note that lockdown shocks in the
model had relatively mild effects on consumer prices,
possibly because the nature of the shock did not lead to a significant upward revision of inflation
expectations. Over the forecast horizon, domestic demand shocks are expected to put less downward
pressures on inflation than in 2019 and 2020. Nonetheless, while the adverse impact of these shocks
on GDP growth vanished, they continued to weigh on the level of economic activity for longer,
translating into low inflation pressure.
(3)
Finally, exchange and interest rate shocks (green bars) contribute positively to growth but
also added to inflation. In particular, interest rate shocks support GDP and inflation. This is because
the current and expected level of interest rates is below the level corresponding to the Taylor-type
monetary policy rule built in the model, which based on the current level of the output gap and
inflation would yield higher policy rates. Shocks associated with the euro depreciation in 2022 also
drive up consumer prices (notably in 2022 and 2023).
Some caveats need to be made. The driving factors that are recovered in this model-based analysis
are conditioned on the structure of the model and the estimated parameter values. While the model
aims to capture crucial aspects of the current macroeconomic environment, it necessarily simplifies
reality and can only represent a limited set of economic transmission mechanisms. For example, the
model does not include energy-related (tax) policies beyond excise duties. Moreover, the large shocks
and non-
methodological challenges for model estimations. Finally, the analysis considers the euro area as a
whole, disregarding the wide variation in growth and inflation developments across euro area countries
(see the country-specific chapters).
(3)
Before the pandemic, the model suggests that deflationary domestic demand shocks had persisted for a long
time, which kept inflation below target. In addition, real wage rigidities can generate further inflation inertia (in
line with the analysis above), explaining a partial decoupling of GDP growth and inflation. On the role of real
of Money, Credit and Banking, 39, 35-65.
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
2019 2020 2021 2022 2023 2024
Graph 2: Euro area real GDP growth, deviations from trend
Energy price shocks Domestic productivity shocks
Labour, goods market shocks Dom. demand, lockdown shocks
Exchange, interest rate shocks External shocks
Others GDP growth (data)
European Economic Forecast, Spring 2023
36
people with low qualifications increased most. However, especially for women with low and
medium qualifications, the employment rate gap to highly educated women remains substantial.
(
9
)
Employment growth in 2022 was especially strong in services and the construction
sector as the remaining pandemic-related restrictions were lifted. According to national
accounts, in 2022 headcount employment grew by 2.0% in the EU, up from 1.5% in 2021.
Following the lifting of pandemic-related restrictions, job growth was strong in contact-intensive
service activities, allowing this sub-sector to recover its 2019 employment levels. Other service
activities also reported strong employment gains, notably professional and IT-related services. The
construction sector also saw solid employment growth, and so did the real estate sector. In
industry, employment growth was subdued and the workforce in this sector is still not back to its
pre-pandemic levels.
Growth of hours worked outpaced
employment growth in 2022. Following the
reduced use of short-term work schemes, total
hours worked grew more vigorously than
headcount employment in 2022, by 2.8% (see
Graph I.2.23). In the fourth quarter of 2022, the
total number of hours worked was 1.1% higher
than the level achieved at the end of 2019. As a
result, hours worked per employee continued to
increase in 2022, although in the fourth quarter
they remained 1.1% below the end-2019 ratio.
The service sector contributed most to the
recovery in hours worked, whereas especially the
industrial sector (excluding construction) lagged
behind.
In some countries the economic slowdown towards year-end left its mark on the labour
market. In the fourth quarter of 2022, according to national accounts, both headcount
employment and hours worked in the EU increased by 0.3% over the previous quarter, despite the
slight economic deceleration. However, Czechia, Latvia, Lithuania, Hungary and Portugal reported a
contraction in employment. In addition, while in most countries the unemployment rate continued
to decrease or remained fairly stable throughout 2022, rates increased in Hungary, Portugal,
Luxembourg, Lithuania, and Cyprus. This suggests that labour markets have started cooling in
these economies but that there are so far no indications of a radical turnaround on aggregate.
Wage growth has picked up since early 2022
but has so far remained well below inflation.
Growth in hourly wages and salaries picked up
speed, from 2.5% y-o-y at the end of 2021 to
more than 5% in 2022-Q4. According to ECB data,
negotiated wages grew by 2.5% y-o-y and more
in each quarter of 2022, up from between 1.3%
and 1.8% in 2021. Growth of compensation per
employee (based on national accounts) also
accelerated, to an annual growth rate of 4.8% in
2022 following 3.9% in 2021.
(
10
)
By all accounts,
however, wage growth remains far below
inflation, entailing negative real wage growth and
(
9
)
This is also related to the fact that in recent years the education composition of the population in working age is
changing, with more young and highly educated people entering whereas many older people with lower qualifications
exit due to demographic change.
(
10
)
Calculated using headcount employment. The figure presented in Statistical Annex table 26 reports the growth rate
based on headcount employment and employment in full time equivalents for Spain, France, Italy, and the Netherlands.
90
95
100
105
19 20 21 22
Graph I.2.23: Labour market recovery since 2019, EU
Employees Hours worked
Hours worked per employee
Index,
2019=100
0
2
4
6
8
10
12
14
16
18
20
BG
HU
PL
RO
LT
LV
EE
HR
BE
PT
SK
CZ
LU
FR
IT
EU
AT
EA
SI
IE
DE
NL
CY
FI
ES
DK
SE
MT
EL
Graph I.2.24: Compensation per employee growth and
HICP inflation in 2022 across Member States
2022 HICP
%
Economic outlook for EA and EU
37
loss of purchasing power for workers. Developments of compensation per employee were
heterogenous across Member States in 2022, with growth picking up in only 14 countries, but still
remaining below HICP inflation (see Graph I.2.24) for almost all. However, in real terms
compensation per employee only grew in Bulgaria and broadly stagnated in France and Portugal,
speaking for a broad-based loss of household purchasing power. Furthermore, despite significant
increases, minimum wages also fell in real terms in many countries, strengthening concerns about
the impact of inflation on the lower income groups.
In the first months of 2023, available data
point to a resilient labour market despite
some cooling. After reaching a new series low of
6.1% in December 2022, the EU unemployment
rate declined further to 6.0% of the active
population (ages 15-74) in February 2023, a new
employment expectations in the EU remained
solidly above their long-term average in all
sectors in April 2023. This points to continued,
though softening, employment growth ahead. In
the construction sector, however, employment had
already contracted in the second half of 2022 and
surveys, shortages of labour were still reported as an important factor limiting production,
especially in the service sector (see Graph I.2.25).
the EU are set to be mild. Continued labour market tightness and labour hoarding due to skill
shortages, as well as the strong performance of the service sector, are expected to limit the lagged
response to the economic slowdown, and a significant increase in unemployment is not expected,
also considering demographic trends. However, employment growth is projected to ease going
forward.
Employment growth is forecast at 0.5% in the EU this year, before edging down to 0.4%
in 2024. Reacting with a lag to the slowdown in economic activity, employment growth (based on
national accounts) is set to come close to a standstill in early 2023, before picking up slightly as
economic activity gradually improves (see Graph I.2.26). However, the job content of growth is
expected to be lower than in 2022, due to persistently tight labour markets. These, combined with
an expected slowdown of inward labour migration in some EU economies and with demographic
developments, will set a limit to employment growth. Hours worked are set to continue outpacing
growth in headcount employment, allowing hours worked per person to further recover their pre-
pandemic levels, albeit not fully.
Headcount employment growth is set to slow
in 2023 in all Member States to varying
rates. Projected employment growth (in national
accounts terms) ranges between -0.6% in
Lithuania and 2.4% in Ireland. Following the return
to moderate economic growth, in 2024
employment growth is expected to pick up
somewhat in most EU economies, though at rates
clearly below the ones observed in 2022. Given
this muted employment growth, progress with
respect to surpassing pre-pandemic employment
levels in the four Member States that had not yet
recovered those in 2022 is set to be limited. In
2024, the number of employed persons in
0
10
20
30
40
1
2
3
4
19-Q1 20-Q1 21-Q1 22-Q1 23-Q1
Graph I.2.25: Labour limiting production and vacancy
rates, EU
Industry and construction - vacancy rate
Services of the business economy - vacancy rate
Industry-Labour as a factor limiting production (rhs)
Services-Labour as a factor limiting production (rhs)
% of total
jobs
Note: * Share of managers indicating shortage of labour force as a factor
limiting production
4
5
6
7
8
9
10
11
12
-3
-2
-1
0
1
14-Q1 16-Q1 18-Q1 20-Q1 22-Q1 23 24
% of the
labour force
%
Graph I.2.26: Employment growth and unemployment
rate, EU
Employment growth (q-o-q, %), forecast (y-o-y, %)
Unemployment rate, forecast (rhs)
forecast
European Economic Forecast, Spring 2023
38
Slovakia would just return to its pre-pandemic level, while it would remain below that level in
Latvia, Bulgaria, and Romania.
Unemployment rates are expected to
respond only mildly to the changing pace of
economic growth. Following many years of
decline, down to 6.2% in 2022, and interrupted
only during the pandemic-induced recession in
2020, the unemployment rate (Eurostat definition)
is expected to remain broadly stable at 6.2% in
the EU in 2023, before edging down to 6.1% in
2024. Slowing economic growth is projected to
result in an increase in annual unemployment
rates in more than half of EU Member States in
2023, with the largest increases in Estonia,
Lithuania, Czechia and Hungary. In 2024,
unemployment rates are set to decline in most
Member States, and in some cases go back to the
2022 levels or even below, also because of demographic trends (e.g. ageing population) (see Graph
I.2.27).
Labour market integration of people fleeing the war in Ukraine is progressing well. By
February 2023, there were about 4 million people fleeing the war in Ukraine who benefited from
temporary protection in EU Member States.
(
11
)
About half of them are hosted in Germany and
Poland, followed by Czechia, Italy and Spain. Relative to the total population, the share of
temporary protection beneficiaries is highest in Czechia, Estonia and Poland. At the end of 2022,
most beneficiaries of temporary protection were Ukrainian nationals, with just around 70 thousand
being nationals from third countries.
(
12
)
About 60% of beneficiaries were adults of working age
(18-64) and about 75% of these were women. Minors (aged below 18) represented about 35% of
beneficiaries, while 6% were elderly (65 and older). It is estimated that about one-in-four adult
beneficiaries of temporary protection were employed by March 2023 (representing about 600
thousand people), up from about one-in-five in September 2022.
(
13
)
This increase is in line with the
trajectory that was projected in the Autumn 2022 Forecast. More than 400 thousand people were
registered as jobseekers with the public employment services.
(
11
)
Eurostat (2023). Beneficiaries of temporary protection at the end of the month by citizenship, age, and sex monthly
data [MIGR_ASYTPSM].
(
12
)
emporary protection for those fleeing Russia's war of aggression against Ukraine: one
year on russels, 8
March.
(
13
)
About 60% of beneficiaries were adults of working age (18-64) and about 75% of these were women. Minors (aged
below 18) represented about 35% of beneficiaries, while 6% were elderly (65 and older). It is estimated that about
one-in-four adult beneficiaries of temporary protection were employed by March 2023 (representing about 600
thousand people), up from about one-in-five in September 2022
(Annual percentage change)
2021 2022 2023 2024 2022 2023 2024 2021 2022 2023 2024 2022 2023 2024
Population of working age (15-74)
0.1 0.2 0.2 0.1 0.3 0.2 0.1 -0.1 0.1 0.2 0.1 0.4 0.2 0.0
Labour force
1.2 1.2 0.6 0.4 0.9 0.4 0.3 1.1 1.1 0.6 0.3 0.9 0.4 0.3
Employment
1.4 2.3 0.6 0.5 1.8 0.1 0.5 1.5 2.0 0.5 0.4 1.8 0.0 0.4
Employment (change in million)
2.2 3.7 1.0 0.8 3.0 0.2 0.9 3.0 4.2 1.0 0.9 3.7 0.0 1.0
Unemployment (levels in millions)
12.8 11.3 11.4 11.2 11.3 12.0 11.7 15.0 13.3 13.5 13.3 13.3 14.1 13.9
Unemployment rate (% of labour force)
7.7 6.8 6.8 6.7 6.8 7.2 7.0 7.1 6.2 6.2 6.1 6.2 6.5 6.4
Labour productivity, whole economy
3.9 1.2 0.4 1.0 1.2 0.1 0.9 3.9 1.5 0.5 1.2 1.4 0.2 1.0
Employment rate (a)
62.6 63.9 64.2 64.4 63.6 63.6 63.8 62.4 63.5 63.7 63.9 63.2 63.0 63.3
(a) Employment as a precentage of population of working age. Definition according to structural indicators. See also note 6 in the Statistical Annex. For the EU
and EA, this table now also displays employment in persons, limiting the comparability to figures published in previous forecasts.
Table I.2.4:
Labour market outlook, euro area and EU
Euro area
EU
Spring 2023
Forecast
Autumn 2022 Forecast
Spring 2023
Forecast
Autumn 2022 Forecast
0
2
4
6
8
10
12
14
CZ
MT
PL
DE
NL
HU
SI
BG
IE
DK
LU
AT
BE
EE
RO
LT
PT
SK
EU
CY
FI
EA
LV
HR
FR
SE
IT
EL
ES
Graph I.2.27: Unemployment rates across Member
States, 2022 and 2024
2022 2024
%
Economic outlook for EA and EU
39
Nominal wage growth is expected to accelerate further but without fully offsetting the
recorded losses in real incomes. Persistent tightness of labour markets, strong increases in
power are set to continue putting upward pressure on wages. Furthermore, as inflation normally
feeds into wage increases with some lag, due to wage bargaining schedules, an immediate, full
restoration of purchasing power cannot be expected and wage pressures are set to persist until
2024, despite the cooling of inflation. After growing by 5.0% in 2022 (4.4% in the euro area), the
annual growth rate of compensation per employee (based on national accounts) is expected to
increase to 5.9% in 2023 (5.5% in the euro area) before falling to 4.6% in 2024 (4.2% in the euro
area). This is significantly more than what was expected in the Autumn Forecast (+0.6 pps. in 2023
and 0.7 pps. in 2024 for the EU). Still, in real terms, growth of compensation per employee is set to
contract slightly further in 2023 in the EU and the subsequent increase in 2024 would leave real
wages almost 1 pp. below the 2021 level. Heterogeneity across countries is large, given the strong
differences in inflation developments, as well as country-specific labour market features, such as
the presence of automatic wage indexation and union coverage of labour contracts.
The outlook for labour productivity has slightly improved. Growth of labour productivity per
employed person (based on national accounts) decreased from 3.9% in 2021 to 1.5% in 2022 as
economic activity slowed down. It is set to decelerate further to 0.5% in 2023, before rebounding
to 1.2% in 2024, which is above the long-term average. Dynamic wage growth would result in a
pick-up of unit labour costs in 2023 and a further sustained increase in 2024.
2.5. INFLATION
Headline inflation continued to decline in the
first quarter of 2023 amid sharp
deceleration of energy prices. The decline in
headline inflation, from 9.2% in December 2022
to 6.9% in March 2023 in the euro area, was
driven by the energy component, which over the
same period saw annual price growth decelerate
sharply from 25.5% to -0.9%. All retail energy
items contributed to this deceleration (see Graph
I.2.28). Between December and March the prices
of gas and electricity fell by 11.5% and 7.5%,
respectively. Together with strong base effects,
this brought annual inflation of gas and electricity
to 8.1% and 4.5% in March, respectively, roughly
40 and 30 pps. down from December. Likewise,
transport fuels saw their annual inflation rate collapse to -11.3% in March (from 6% in December),
as large base effects more than offset a slight increase in fuel prices in the first months of 2023.
-15
-10
-5
0
5
10
15
20
25
30
35
40
45
Dec-20 May-21 Oct-21 Mar-22 Aug-22 Jan-23
Graph I.2.28: Annual energy inflation and
contributions from key energy commodities, euro area
Other heating fuels and heat energy
Electricity
Gas
Fuels for transport
Total energy
%, pps.
European Economic Forecast, Spring 2023
40
Food prices continued to increase sharply
(see Graph I.2.29). Prices of food (including
alcohol and tobacco) accelerated in the first
quarter of 2023 to a historic high of 15.5% y-o-y
in December in the euro area, up by 1.6 pps. from
December. Inflation of unprocessed foods, having
moderated from the peak of 15.5% y-o-y in
October to 11.3% in January, rebounded strongly
in February and March (to 14.8%) largely driven
by vegetable and fruit prices. Inflation of
processed foods (including alcohol and tobacco)
continued to rise steadily since mid-2021,
reaching 15.7% y-o-y in March. Upward pressures
from past supply shocks, including the surge in
energy and other input prices, shortages, and the
depreciation of the euro in 2022 continued to drive retail prices in an environment of firming wage
growth.
Inflation of non-energy industrial goods
appears to have peaked in the first quarter
of 2023 (see Graph I.2.30). Still, the dynamics
vary across types of goods. Inflation of durable
and semi-durable goods appears to have peaked,
suggesting the fading out of impulses related to
pandemic shocks, including sharp shifts in demand
and supply-side bottlenecks that were pushing
prices up in both categories over the past three
years. At the same time, prices of non-durables
continued to accelerate through March.
Services inflation remains high. Price
pressures in services firmed further in early 2023,
with annual inflation in all major service
categories
(
14
)
rising in February and March (see
Graph I.2.31). Pressures remain particularly strong
in contact-intensive services, where, following
some moderation in the second half of 2022,
annual inflation picked up again in 2023 driven by
transport and package holidays. This suggests
that re-opening effects continue to play a role,
particularly in sectors where persistently high
demand interacts with supply-side challenges,
including still high energy costs, labour shortages
and accelerating wage growth. Price pressures
continue to build also for the remaining services, pointing to a more persistent effect of past input
cost shocks, accelerating wage dynamics combined with ongoing demand pressures. Some
tentative signs of bottoming out have emerged in early 2023: the share of services with rising
prices peaked in January, suggesting that price pressures in services may no longer be broadening
(see Graph I.2.32).
(
14
)
Communication, housing, transport, recreation/personal care incl. repairs and miscellaneous
0
100
200
300
400
90
100
110
120
130
140
150
Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Graph I.2.29: Pipeline pressures for consumer food
inflation, euro area
HICP-food
EU Agricultural Commodity Price Index
PPI- manufacturing of food products
HWWI Energy Raw Materials Index (rhs)
Indices,
average 2019-2021=100
Source: Hamburg Institute of International Ecconomic (HWWI)
0
10
20
30
40
50
60
-2
0
2
4
6
8
10
Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23
Graph I.2.30: Pipeline pressures for consumer goods
inflation, euro area
HICP - non-energy industrial goods
PPI consumer goods (except food)
Shortages in material and/or quipment in manufacturing (rhs)
% change, y-o-y
% of firms
10
20
30
40
50
60
70
80
90
-2
0
2
4
6
8
10
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Graph I.2.31: Share of services with positive inflation
and annual inflation of contact-intensive and other
services, euro area
Share of services with positive inflation* (rhs)
Contact-intensive
Other services
Note:* Percent of 5-digit COICOP service items that registered positive
month-on-month inflation (s.a.) on average in the last three months.
% y-o-y
%
Economic outlook for EA and EU
41
Core goods and services replaced energy as
the primary driver of headline inflation. All
major subcomponents of the HICP, except energy,
have seen their annual inflation rate increase
between December and March. Consequently, core
inflation (headline excluding energy and
unprocessed food) continued to rise in early 2023,
from 6.9% y-o-y in December to a historical high
of 7.6% in March. As a result, core price pressures
accounted for more than 90% of headline
inflation in March compared to around 60% in
December and 35% in January of 2022.
The peak in core inflation may be nearing.
Various indicators paint a rather heterogenous
picture of trends in underlying price pressures.
While conventional measures based on permanent
exclusion
(
15
)
as well as the supercore inflation
measure of the ECB
(
16
)
continued to accelerate in
the first quarter of 2023, other indicators of
underlying price pressures suggest that these may
have stabilised (see Graph I.2.33). For example,
trimmed means and medians
(
17
)
suggest that
annual price pressures may have peaked in the
first quarter. Moreover, the share of core items
that register positive (monthly) inflation has
continued to decline from its late-2022 peak,
suggesting that core price pressures are not
broadening anymore (even if they remain broad-
surveys
(
18
)
showed a further easing of manager
months in the sectors of consumer goods and services. This suggests an imminent moderation of
price pressures from the corresponding core items of the consumption basket, including services,
where the decline in price expectations is more recent.
(
15
)
and energy (the ECB definition).
(
16
)
The ECB supercore indicator belongs to the class of frequency-based exclusion, and aggregates HICP items that are
estimated to co-move with the business cycle
(
17
)
Trimmed means are a weighted average of the inner core of the sorted price changes distribution with a certain
percentage of items trimmed from both tails of the distribution. Weighted/unweighted median is the inflation of the
median basket component (by cumulated weight / by count) of the sorted price change distribution. Both weighted and
unweighted median (the latter not shown in the graph) and other alternative trimmed means (with the trim factor
ranking from 5-30%) all point to a decline in the underlying inflation in the first quarter.
(
18
)
European Business Cycle Indicators (europa.eu)
0%
20%
40%
60%
80%
100%
Jun-21 Oct-21 Feb-22 Jun-22 Oct-22 Feb-23
Graph I.2.32: Structure of contributions to the annual
headline inflation, euro area
Energy and unprocessed foods Non-energy industrial goods
Processed food Services
% of headline inflation
core price pressures
10%
30%
50%
70%
90%
0
2
4
6
8
10
Mar-20 Mar-21 Mar-22 Mar-23
Graph I.2.33: Measures of underlying price pressures,
euro area
Percent of core items with positive inflation* (rhs)
Trimmed mean 10%
Weighted median
HICP excl. energy and unprocessed foods
ECB Supercore
Note: * Percent of 5-digit COICOP core items that registered positive
month-on-month inflation (s.a.) on average in the last three months.
Source: ECB for ECB Supercore
y-o-y %
European Economic Forecast, Spring 2023
42
Within-EU inflation heterogeneity has risen
further. Intra-EU inflation dispersion
(
19
)
increased
further in the first quarter of 2023 as falling
wholesale energy prices pushed consumer energy
inflation down to a varying extent, while core price
pressures continued to build at different paces
across the EU (see Graph I.2.34). In the euro area,
dispersion measured by the standard deviation
continued to decline from the peak in September
2022 but remained on an upward trend if
measured by the coefficient of variation (i.e.,
adjusted for the level of inflation). Energy
continued to be the key driver of disinflation in
headline rates in the first quarter. In March, 25
Member States posted declining growth rates of
energy prices (all except MT and SI) and headline
rates (all except MT and RO), compared to only 15 in the case of core inflation.
The contribution of energy to headline
inflation is set to wane. Sharply lower natural
gas prices (see section 2.1.) are making their way
through to retail prices of gas and electricity,
though at varying speeds across the EU Member
States. The pass-through is expected to be
gradual and drawn-out due to lengthy
transmission lags and idiosyncratic factors related
to domestic wholesale and retail energy
markets,
(
20
)
as well as to government measures
aimed at lowering retail prices of energy. The
eventual expiration of these measures across the
EU is set to generate a certain inflationary
impulse over the forecast horizon, though
declining wholesale and retail energy prices have
markedly weakened its impact. Moreover, sizeable base effects, negative in 2023 but turning
positive in the first half of 2024, are expected to add volatility to the annual energy inflation rates.
All in all, annual energy inflation in the euro area and in the EU is projected to decline progressively
over the course of 2023, and to turn negative as from 2023-Q3, but to remain in low single-digits
(in absolute terms) over the entire forecast horizon. Its contribution to headline inflation in 2023 is
thus expected to decline to a small fraction of what it was in 2021 and 2022 (see Graph I.2.35),
and to turn negative in 2024 - markedly lower compared to the Winter interim Forecast in both
cases.
Inflation of food and manufactured goods is expected to have peaked in 2023-Q1.
Annual inflation of food (both processed and unprocessed) and non-energy industrial goods in the
euro area and the EU is projected to have peaked in the first quarter and decline gradually in 2023
and 2024, supported by sizeable negative base effects. Food prices are expected to decelerate
reflecting moderation in agricultural commodity prices implicit in futures contracts and lower prices
of other inputs, including, most prominently, energy. Inflation is, however, set to persist well above
historical averages, particularly in 2023, as those input costs remain elevated by historical
standards, droughts are weighing on agricultural production in many parts of Europe, and wage
(
19
)
Measured both by a simple standard deviation of individual inflation rates as well as a coefficient of variation (defined
as standard deviation over mean) that takes account the absolute value of inflation and is therefore a more
appropriate measure when a clear trend is present in the inflation series.
(
20
)
Such as, discreet adjustments of energy prices by regulatory agencies, and staggered renewal of wholesale and retail
energy contracts.
-5
0
5
10
15
20
25
30
Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23
Graph I.2.34: Disperion of annual inflation rates, EU
Min Max EU headline inflation
Note: Range between the 10
th
and 90
th
percentile marked in
orange.
%
-2
0
2
4
6
8
10
12
16 17 18 19 20 21 22 23 24
Graph I.2.35: Inflation breakdown, EU
energy
unprocessed food
non-energy industrial goods
processed food incl alcohol &tobacco
services
HICP, y-o-y % change
y-o-y %
change
forecast
core
inflation
Economic outlook for EA and EU
43
pressures build across the agricultural and retail sectors. Inflation of non-energy industrial goods is
expected to continue moderating from the peak in February, reflecting lower pipeline pressures due
to, for example, the progressive easing of supply chain bottlenecks, as well as to the appreciation
of the euro.
Services inflation is projected to be relatively more persistent amid robust wage
growth. Price pressures in services are proving more persistent than previously expected as
lingering re-opening effects interact with building wage pressures. Tight labour markets and claims
to recoup purchasing power are expected to keep growth in compensation per employee elevated
in both 2023 and 2024 (see section 2.4.). Annual services inflation is thus projected to peak in the
second quarter of 2023 in both the euro area and in the EU, and to come down slowly thereafter,
exceeding double the historical average for most of the forecast horizon.
Core inflation is set to decline gradually as profit margins absorb higher wages and
tighter financing conditions prove effective in cooling demand. Persistently high price
pressures in services coupled with only slowly fading pressures in (processed) food and goods are
expected to keep core inflation elevated, and above headline inflation throughout 2023 and
2024
(
21
)
. Despite sizeable negative base effects, average core inflation in the euro area in 2023, at
6.1%, is set to exceed that in 2022, before falling to 3.2% in 2024, almost double the historical
average. Corporate profit margins, which have been on the rise since 2021 and are set to increase
further in 2023 (see Box I.2.3), are expected to be squeezed significantly in 2024 (to below 2021
levels), providing a buffer for the strong growth in labour cost. Overall, this should allow a gradual
moderation in core inflation. Easing supply bottlenecks, lower commodity prices and transport
costs should also support a steady weakening of core price pressures. Finally, progressively tighter
lending standards and tightening monetary policy
(
22
)
are set to play an increasingly important role
in cooling demand for core goods and services, contributing to the gradual moderation in core price
pressures.
Headline inflation has been revised higher compared to the Winter Forecast as stronger
core price pressures more than offset lower energy inflation. Both headline and core
inflation are set to continue on their downward path in the remainder of 2023 and 2024, with core
inflation expected to have peaked in the first quarter of 2023. Headline inflation is projected to
decline from 8.0%/9.4% y-o-y in 2023-Q1 in the euro area/EU, to 3.5%/4.1% in 2023-Q4, and then
continue slowing at a more measured pace in 2024, to 2.3%/2.5% in 2024-Q4. On an annual
basis, headline inflation is set to decline from 8.4%/9.2% in 2022 to 5.8%/6.7% in 2023, before
moderating to 2.8%/3.1% in 2024 in the euro area/EU. Revisions with respect to the Winter interim
Forecast amount to around ¼ pps. in both 2023 and 2024 in both the euro area and the EU for
(
21
)
Published after the cut-off date, the April flash estimate of HICP inflation in the euro area, remains broadly in line with
this outlook. Annual inflation slowed vis-à-vis March in food (from 15.5% y-o-y in March to 13.6% in April), non-energy
industrial goods (from 6.6% to 6.2%) and core inflation excluding unprocessed foods and energy (from 7.5% to 7.3%).
Consistent with the forecast expectations, pressures in services proved more persistent, leading to a slight increase in
the annual rate (from 5.1% to 5.2%), while energy inflation picked up reflecting the expected volatility of the annual
series due to base effects and expiration of energy measures.
(
22
)
Both due to past policy rate increases, together with its lagged effects, as well as to future increases consistent with
market expectations
European Economic Forecast, Spring 2023
44
Inflation expectations of financial markets
have moved up slightly, but remain overall
well anchored. Following the peak in mid-March,
triggered by financial tensions in the US and
Switzerland, both short-term and medium-term
market-based inflation expectations have fallen
steadily until early April and rose slightly again
thereafter (see Graph I.2.36) to levels somewhat
above those at the Winter interim Forecast cut-off
date. In late April the 5y-5y, 3y-3y and 1y-1y
inflation-linked swaps (which include risk premia)
reached 2.5%, 2.4% and 2.3%, respectively,
somewhat above the ECB's medium-term
objective for inflation. The recent ECB survey of
professional forecasters for the second quarter of
2023, released after the cut-off date, showed headline inflation at 5.6% and 2.6% in 2023 and
2024, respectively, somewhat lower than in the first quarter, and core inflation revised up in 2023.
Forecasts for core inflation in 2024 and 2025 and longer-term inflation expectations (both
headline and core) were unchanged.
Intra-EU dispersion of inflation rates is
expected to remain elevated in 2023, but to
narrow considerably in 2024. Inflation
dispersion in 2022 was largely driven by
differences in its energy component (ranging from
0% in Malta to 70.5% in the Netherlands) and, to
a smaller extent, in food. The outlook for energy
inflation in 2023 is a mirror image to that in
2022: Member States with the highest increases
last year are those expected to experience the
sharpest downward corrections this year.
However, as the impact of energy on inflation
wanes over the forecast horizon and core goods
and services take over as main inflation drivers,
within-EU heterogeneity in headline inflation
predominantly reflects differences in projected core inflation. The latter can be attributed to
differences in domestic conditions, including the wage outlook and the extent to which price mark-
ups adjust (see Graph I.2.37).
(Annual percentage change)
2021 2022 2023 2024 2022 2023 2024 2021 2022 2023 2024 2022 2023 2024
Private consumption deflator
2.3 6.9 5.5 2.6 7.2 5.8 2.5 2.5 7.6 6.1 2.8 8.0 6.4 2.8
GDP deflator
2.1 4.6 5.7 2.7 4.6 5.3 3.4 2.4 5.4 6.1 2.9 5.2 5.7 3.5
HICP
2.6 8.4 5.8 2.8 8.5 6.1 2.6 2.9 9.2 6.7 3.1 9.3 7.0 3.0
Compensation per employee
3.9 4.4 5.5 4.2 4.2 4.9 3.6 3.9 5.0 5.9 4.6 4.6 5.2 3.9
Unit labour costs
0.0 3.2 5.0 3.2 3.0 4.8 2.7 0.0 3.5 5.4 3.3 3.2 5.0 2.8
Import prices of goods
9.8 21.4 -0.6 1.3 21.6 4.7 0.4 9.7 21.7 -0.3 1.4 21.7 5.5 0.7
Table I.2.5:
Inflation outlook, euro area and EU
Euro area
EU
Spring 2023
Forecast
Autumn 2022 Forecast
Spring 2023
Forecast
Autumn 2022 Forecast
1.5
2.0
2.5
3.0
Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23
%
Graph I.2.36: Inflation expectations derived from
implied forward inflation-linked swap rates
5 years forward 5 years ahead
3 years forward 3 years ahead
1 year forward 1 year ahead
S
Source: Bloomberg
EU
4
9
14
19
24
4 6 8 10 12 14 16 18 20 22 24
Cumulative wage growth (per employee)
Cumulative core HICP growth
Graph I.2.37: Core inflation vs. wage growth,
cumulative in 2023-2024
Other EU countries Central and Eastern Europe EU
Economic outlook for EA and EU
45
Inflation in central and eastern Europe is
projected to remain markedly higher
compared to the rest of the EU. Graphs I.2.37
and I.2.38 provide evidence for the strong
geographical pattern in EU inflation map. Central
and Eastern European (CEE) countries rank
considerably higher than their Western European
peers in both 2023 and 2024. This suggests that,
as the impact of the imported commodity-price
shock wears off, domestic drivers (including the
Harrod-Balassa-Samuelson effect
(
23
)
and currency
movements) resume the central role in explaining
inflation differentials within the EU.
2.6. CURRENT ACCOUNT
Soaring import prices pulled the EU
merchandise trade balance down to a
record-low deficit in 2022. The extra-EU trade
balance of goods dropped to a record-low deficit
of EUR 430 billion in 2022. The deficit was due, in
particular, to the steep rise in the value of energy
imports, which started towards the end of 2021
as energy prices began to increase, and continued
through most of 2022. The value of exports also
increased, as in a context of global inflationary
pressures, companies were able to charge their
global customers higher export prices (see Graph
I.2.40). However, the increase in import prices
largely outweighed that in export prices, resulting
in a significant drop in terms of trade in 2021, by
-3.2%, and further in 2022, by a record -5.7%.
Falling energy prices reduce the cost of
goods imports into the EU. Import price (import
deflator) growth decelerated in the fourth quarter
of 2022 on a yearly basis (by 10 pps. y-o-y,
compared to its peak in the second quarter),
driven by lower energy prices. As these continued
to decline in the first months of 2023, growth of
import prices is set to have decelerated further.
Growth of export prices also went down, albeit
from a lower rate, and lost 5.5 pps. in the fourth
quarter 2022, y-o-y, compared to its high in the
second quarter. Based on futures energy prices,
import prices for goods are projected to decrease
slightly in 2023 (by -0.3%), while growth of export
prices would slow down significantly (to 2.7%) in
2023. The expected decline of import deflators implies a sharp rebound in the terms of trade of
goods in 2023, by 2.9%. In 2024, a projected pick up of import prices and further deceleration of
export prices should limit the further improvement in terms of trade to 0.5%, which is close to the
2014-18 average.
(
23
)
Harrod-Balassa-Samuelson effect offers supply-side explanation of higher inflation and the associated real exchange
rate appreciation in countries experiencing higher relative productivity growth
0
5
10
15
20
25
30
35
40
FR
LU
FI
MT
CY
ES
IE
DK
SE
PT
EL
EA
BE
IT
DE
EU
AT
HR
NL
SI
RO
BG
LV
SK
LT
CZ
PL
EE
HU
Graph I.2.38: Cumulative headline inflation across Member
States, 2022-2024
2022 2023 2024
%
-80
-70
-60
-50
-40
-30
-20
-10
0
-80
-60
-40
-20
0
20
40
Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23
Graph I.2.39: Extra-EU trade balance, EU
Total Energy (rhs)
EUR
billion
EUR
billion
80
90
100
110
120
130
140
150
160
-500
-400
-300
-200
-100
0
100
200
300
2015 2016 2017 2018 2019 2020 2021 2022
Graph I.2.40: Extra-EU trade balance, trade volume
versus value
Balance Exports val index
Imports val index Exports vol index
Imports vol index
EUR billion
Index,
2015=100
European Economic Forecast, Spring 2023
46
In 2023 and 2024, the improvement in terms
of trade is set to boost the EU merchandise
trade surplus, and the services balance is
projected to remain stable. Despite the trade
balance surplus recorded in February, the
cumulative trade balance for goods of the first
two months of this year remained at a deficit
(EUR 31 billion). However, it improved compared
to the same period of 2022 (when the trade
deficit was EUR 55.1 billion). As the terms of trade
for goods continue improving and the volume of
net exports of goods is projected to keep
increasing, the EU merchandise trade balance is
forecast to turn positive this year and improve
further next year, thus moving from -1.1% of GDP in 2022 to 1.7% in 2024. The services trade
balance remained strong in 2022 and is forecast to remain stable over the forecast horizon, with
tourism continuing being a strong driver of the economic rebound.
The EU current account surplus is set to
recover over the forecast horizon. The
expected recovery of the EU trade balance for
goods and services is also expected to push the
current accounts surplus up again in 2023. With
the deficit of primary incomes and current
transfers set to stay broadly stable over the
forecast horizon, the current account balance is
projected to turn into a surplus of 2.0% of GDP in
2023 and improve further to 2.3% in 2024.
2.7. PUBLIC FINANCES AND THE FISCAL POLICY STANCE
The economic recovery supported further reduction in the EU government deficit in
2022. Starting from a historically high level of 6.7% of GDP in 2020, the EU aggregate general
government deficit dropped to 4.8% in 2021 and to 3.4% in 2022 (see Graph I.2.44). The
continued economic expansion facilitated the deficit reduction last year. In particular, the improved
cyclical component of the budget and discretionary policy had a deficit-decreasing effect (see
Graph I.2.43)
(
24
)
. The phasing out of the pandemic-related temporary measures
(
25
)
more than offset
the support measures to soften the impact of high energy prices on households and firms. Taking
into account that the latter were partly compensated by windfall taxes on energy producers and
suppliers, amounting to 0.2% of GDP, the estimated net budgetary cost of energy support
measures reached 1.2% of GDP in the EU in 2022.
(
26
)
In addition, the 2022 EU deficit was affected
(
24
)
Given the high uncertainty surrounding potential growth estimates in these exceptional circumstances, the calculation
of the impact of automatic stabilisers on the government balance is subject to larger revisions than usual.
(
25
)
The budgetary cost of the COVID-19 temporary emergency measures (mostly on the expenditure side) in the EU is
estimated to have declined to 0.6% of GDP in 2022, from 3.1% in 2021 and 3.3% in 2020. It is assumed to become nil
in 2023. As the implementation in 2020-21 and subsequent phasing-out of sizeable temporary emergency measures in
2022-23 blurs the reading of underlying fiscal developments these measures are excluded from the fiscal stance
computations (see also footnote 31).
(
26
)
Energy support measures, which mainly consist of reductions in indirect taxes, subsidies on energy products or
production, as well as price caps, are estimated according to the following criteria: (1) measures credibly announced
-100
-75
-50
-25
0
25
50
75
100
-6
-4
-2
0
2
4
6
2010 2012 2014 2016 2018 2020 2022 2024
Graph I.2.41: Trade balance and terms of trade of
goods, EU
Terms of trade goods
Trade balance goods (% GDP)
Import prices (rhs)
Energy import prices (rhs)
%
forecast
%
-2
-1
0
1
2
3
4
5
18 19 20 21 22 23 24
Graph I.2.42: Current-account balance, EU
Net primary income and current transfers
Balance of services
Balance of goods
Current account balance
% of GDP
forecast
Economic outlook for EA and EU
47
by the budgetary cost of sheltering and integrating people fleeing the war in Ukraine, which is
estimated at 0.1% of GDP. Finally, interest expenditure increased by more than 0.2 pps. of GDP in
2022, driven by higher interest rates and higher yields on government bonds indexed to inflation.
The gradual phasing out of discretionary
policy is expected to drive further deficit
reductions in 2023 and 2024. A further
decrease in the EU aggregate deficit is projected
for 2023, to 3.1% of GDP. This decline is driven by
discretionary policy, and is mainly related to the
complete phasing out of COVID-19 temporary
emergency measures, lower capital transfers
(especially in Italy, related to the phasing out of
sizeable house renovation tax credits) and, to a
lesser extent, to the reduced net budgetary cost of
energy support measures (by 0.1 pps. of GDP, to
1.1%) (see Graph I.2.43). By contrast, the cyclical
component and interest expenditure are both set
to provide small deficit-increasing impacts in
2023. Based on unchanged policies, the EU aggregate deficit is projected to continue falling, to
2.4% of GDP in 2024, driven by the almost complete phasing out of energy support measures,
currently projected for next year.
Fourteen EU Member States are set to have
a deficit greater than 3% of GDP in 2023
(see Graph I.2.44). Based on unchanged policies,
the number of Member States with a public deficit
above 3% of GDP is expected to drop back to 10
in 2024. All Member States but Cyprus and Ireland
are projected to have a worse headline budgetary
position in 2024 than before the pandemic, in
2019.
Expenditure and revenue ratios are projected
to fall on aggregate in the EU over the
forecast horizon. The revenue-to-GDP ratio
declined in 2022 (by 0.4 pps. of GDP), mainly due
to the reduction in VAT rates and excise duties on
energy products. Further declines in the EU
revenue ratio are expected in 2023 and 2024 (by
0.6 and 0.2 pps. of GDP, respectively) (see Graph
I.2.45). This further fall in the revenue ratio would
be driven by a reversal of the sizeable revenue
windfalls estimated for the period 2020-22, when
the composition of nominal economic growth (e.g.
higher consumption of goods) and climbing prices
of imported energy had resulted in tax returns
and specified in sufficient detail; (2) strict and consistent definition of an energy measure; (3) measures with an impact
on the government budget balance
in European Commission (2022): European Economic Forecast, Autumn 2022, Institutional Paper 187, November 2022
for more details).
-0.5
0.0
0.5
1.0
1.5
2.0
2022 2023 2024
Graph I.2.43: Drivers of the change of the government
balance, EU
Discretionary policy and other factors
Interest Expenditure
Cyclical component
Total change budget balance
pps. of GDP
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
BG
SK
BE
MT
RO
HU
FR
PL
IT
ES
CZ
SI
LV
EE
FI
NL
LU
LT
HR
AT
DE
EL
SE
PT
DK
CY
IE
EA
EU
Graph I.2.44: Budget balance developments across
Member States
2024 2023 2022 3% deficit limit
% of GDP
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2022 2023 2024
Graph I.2.45: Expenditure and revenues contributions to
the change of general government balance, EU
Revenue Expenditure Change in budget balance
pps. of GDP
European Economic Forecast, Spring 2023
48
increasing more than nominal GDP in most Member States.
(
27
)
After falling by 1.9 pps. of GDP in
2022, the expenditure-to-GDP ratio in the EU is expected to decline by a further 1.7 pps. between
2022 and 2024, driven by reduced discretionary expenditure due to the complete phasing out of
pandemic-related spending and lower subsidies to private investments. Given its delayed impact
on government spending, high inflation supported the fall in the expenditure-to-GDP ratio in 2022,
but a reversal of this impact is expected in 2023 and 2024 due to the indexation to previous-year
inflation of large expenditure items like pensions and other social benefits as well as higher public
wages and prices for new public procurements.
Rising public investment is improving the
composition of expenditure. The EU aggregate
public investment ratio is expected to rise to 3.4%
of GDP in 2024 (see Graph I.2.46). It was 3% of
GDP in 2019 and 3.2% in 2022. Half of the
increase in public investment between 2019 and
2024 is related to investment financed by the EU,
particularly by the RRF.
(
28
)
By the end of the
forecast horizon, 17 EU countries are projected to
spend more on nationally-financed public
investment than they did prior to the pandemic.
Italy, Slovenia and Greece are the countries with
the largest projected increase in nationally-
financed investment compared to 2019.
(
27
)
Revenue windfalls (shortfalls) are estimated through the increase (decrease) in the revenue-to-GDP ratio that is not
explained by discretionary measures or transfers from the EU budget.
(
28
)
Differences in EU financed investment between Member States depend on the allocation of Recovery and Resilience
Facility grants and other EU funds, as well as the degree of absorption.
(% of GDP)
2021 2022 2023 2024 2022 2023 2024 2021 2022 2023 2024 2022 2023 2024
Total receipts (1)
47.3 47.1 46.4 46.3 47.1 46.7 45.7 46.9 46.5 45.9 45.7 46.4 46.1 45.2
Total expenditure (2)
52.6 50.7 49.6 48.8 50.5 50.3 49.0 51.7 49.8 49.0 48.1 49.8 49.7 48.4
Actual balance (3) = (1)-(2)
-5.3 -3.6 -3.2 -2.4 -3.5 -3.7 -3.3 -4.8 -3.4 -3.1 -2.4 -3.4 -3.6 -3.2
Interest expenditure (4)
1.5 1.7 1.7 1.8 1.6 1.8 1.9 1.4 1.6 1.7 1.8 1.5 1.7 1.9
Primary balance (5) = (3)+(4)
-3.9 -1.9 -1.4 -0.6 -1.9 -1.9 -1.4 -3.4 -1.8 -1.4 -0.7 -1.8 -1.8 -1.4
Cyclically-adjusted budget balance (a)
-4.3 -3.8 -3.2 -2.6 -3.7 -3.4 -3.2 -3.9 -3.5 -3.0 -2.4 -3.6 -3.2 -3.0
Cyclically-adjusted primary balance (a)
-2.8 -2.1 -1.5 -0.7 -2.1 -1.6 -1.3 -2.5 -1.9 -1.3 -0.7 -2.0 -1.5 -1.1
Structural budget balance (a)
-4.3 -3.7 -3.2 -2.5 -3.6 -3.4 -3.2 -3.9 -3.5 -3.0 -2.4 -3.6 -3.2 -3.0
Change in structural budget balance (a)
-0.6 0.6 0.5 0.7 0.6 0.2 0.3 -0.3 0.4 0.5 0.6 0.3 0.3 0.3
Gross debt
97.2 93.1 90.8 89.9 93.6 92.3 91.4 89.5 85.3 83.4 82.6 86.0 84.9 84.1
(a) as a % of potential output. The structural budget balance is the cyclically-adjusted budget balance net of one-off and other temporary measures estimated
by the European Commission.
Table I.2.6:
General Government budgetary position, euro area and EU
Euro area
EU
Spring 2023
Forecast
Autumn 2022
Forecast
Spring 2023
Forecast
Autumn 2022
Forecast
0
1
2
3
4
5
6
7
IE
CY
DE
ES
BG
BE
MT
PT
DK
AT
NL
IT
LT
FR
SK
PL
CZ
LU
RO
FI
EL
HR
EE
SE
SI
HU
LV
EU
EA
Graph I.2.46: Public investment in 2019 and 2024
across Member States
Nationally-financed, 2024 RRF, 2024
EU funds (excl. RRF), 2024 Nationally-financed in 2019
% of GDP
Economic outlook for EA and EU
49
Inflation surprises support the reduction in
debt-to-GDP ratios in the short term. The
public debt-to-GDP ratio fell to around 85% in the
EU aggregate at the end of 2022 (93% in the
euro area), from the historically high level of
around 92% recorded in 2020 (99% in the euro
area).
(
29
)
The EU aggregate debt ratio is expected
to fall despite debt-increasing primary deficits,
thanks to economic growth and inflation (see
Graph I.2.47). In particular, the increase in the GDP
deflator had a significant debt-decreasing impact
in 2022, and is projected to continue detracting
from the debt-to-GDP ratio in 2023 and, to a
lesser extent, also in 2024. Higher interest rates
are set to affect only gradually the implicit cost of
he interest-
growth differential ('snowball effect') is expected to continue decreasing debt ratios over the
forecast horizon.
(
30
)
As a result, the debt-to-GDP ratio is projected to decline to around 83% in the
EU aggregate in 2023 and in 2024 (91% and 90% in the euro area), but to remain above the pre-
COVID-19 crisis level of around 79% (86% for the EA) in 2019.
The pace of decline in public debt ratios
varies across countries. By 2024, the debt-to-
GDP ratios are projected to decline in most EU
countries from the 2020 peak, with particularly
large falls in Greece (52 pps.), Cyprus (41 pps.),
Portugal (32 pps.), Croatia (25 pps.) and Ireland
(20 pps.). At the same time, public debt ratios are
set to remain above their 2019 level in all
Member States excluding Ireland, Greece, Croatia,
Cyprus, Portugal, Denmark and Sweden. 13
Member States are projected to have debt ratios
greater than 60% of GDP at the end of 2024; in
six of them (Belgium, Greece, Spain, France, Italy,
and Portugal) they are set to be greater than
100% (see Graph I.2.48).
The EU fiscal stance is projected to turn slightly contractionary in 2023, after
significant expansion in 2022. The fiscal stance in the EU was very expansive in 2022, by
around 2% of GDP (see Graph I.2.50), following an overall expansionary stance estimated at
around 1½% of GDP for 2020-21.
(
31
)
Primary current expenditure financed by the national budgets
(net of discretionary revenue measures) contributed significantly to the 2022 expansionary fiscal
stance, in particular energy support measures (see Graph I.2.51). A significant expansionary
ubsidies to
private investment, which increased further in 2022 after the strong increase already recorded in
2021 (especially in Italy). The slightly contractionary fiscal stance projected for 2023 (by almost
(
29
)
These debt data are not consolidated for intergovernmental loans.
(
30
)
impact of real GDP growth and inflation (GDP deflator) on the debt ratio.
(
31
)
The fiscal stance measures the short-term impulse to the economy from discretionary fiscal policy. Following the
Council recommendations on the 2021 Stability and Convergence Programmes, the net expenditure aggregate used to
assess the fiscal stance was adjusted to include expenditure financed by RRF grants and other EU funds and to exclude
the temporary emergency measures related to COVID-19. These measures mainly consisted of transfers necessary to
keep afloat households and firms hit by the pandemic and included sizeable amounts for short-time work schemes.
However, their direct impact on economic growth is assumed to be limited and not necessarily related to the time of
disbursement, due to the pandemic-related restraints on economic activity (e.g. widespread lockdowns, travel
restrictions, etc.).
-8
-6
-4
-2
0
2
4
6
8
10
12
14
16
2020 2021 2022 2023 2024
Graph I.2.47: Drivers of change in the debt-to-GDP
ratio, EU
Primary balance Stock-flow adjustment
GDP deflator effect Real GDP growth effect
Interest expenditure Change in the debt ratio
pps. of GDP
0
30
60
90
120
150
180
210
EE
BG
LU
SE
DK
IE
LT
LV
CZ
RO
NL
PL
SK
MT
DE
HR
SI
FI
AT
HU
CY
PT
BE
FR
ES
IT
EL
EU
EA
% of GDP
Graph I.2.48: Debt developments across Member States
2024 2022 2021
60% 100%
European Economic Forecast, Spring 2023
50
½% of GDP) is mainly related to the reversal of those subsidies. The expected lower net budgetary
cost of energy support measures will also contribute to this slightly contractionary stance.
Increasing expenditure financed by RRF grants and other EU funds are set to provide a slightly
expansionary contribution in 2023.
Absorption of RRF grants is set to increase
over the forecast horizon. For the EU as a
whole, absorption of RRF grants increased to 0.3%
of GDP in 2022 (from 0.2% in 2021). It is set to
increase further in 2023, to 0.4% of GDP, and to
broadly stabilise in 2024. Over the 2021-24
period, expenditure financed by RRF grants is
expected to be above 3.5% of GDP in Spain and
Greece, more than 3% in Croatia and Portugal,
around 2.5% in Slovakia and Italy, around 2% in
Latvia, Bulgaria and Romania, close or above 1.5%
in Lithuania, Poland, Hungary, Cyprus and Czechia,
and more than 1% in Slovenia, Malta, Estonia, and
France (see Graph I.2.49).
In 2024, based on unchanged policies, the EU
fiscal stance is projected to be
contractionary (by around ¾% of GDP). This is
mainly driven by lower net current spending
related to the phasing out of energy support
measures (see Graph I.2.51). Investment financed
by the national budgets is the only component
that is projected to provide a slightly expansionary
contribution next year. As a result, fiscal policies in
2023-24 are not expected to fuel additional
inflationary pressures and would be broadly
consistent with the ongoing normalisation of
monetary policy.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
LU
IE
DK
NL
DE
FI
SE
BE
AT
SI
MT
EE
FR
CZ
CY
HU
PL
LT
RO
BG
LV
IT
SK
PT
HR
EL
ES
EU
EA
Graph I.2.49: RRF grants absorption across Member States
2021 2022 2023 2024
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
2020 2021 2022 2023 2024
Graph I.2.50: Fiscal stance and its components, EU
Expenditure financed by RRF grants and EU funds
Other capital expenditure
Nationally financed primary current expenditure
Nationally financed investment
Fiscal stance
Contractionary/ Consolidation
Expansionary/Relaxation
% of GDP
-1.75
-1.50
-1.25
-1.00
-0.75
-0.50
-0.25
0.00
0.25
0.50
0.75
1.00
1.25
2022 2023 2024
Graph I.2.51: Nationally-financed net primary current
expenditure, contribution to the EU fiscal stance and
drivers
UA refugee costs
Targeted energy measures
Non-targeted energy net of revenues on windfall profits
Other primary current expenditures
Total
Total excl. targeted energy/refugee
Contractionary/Consolidation
Expansionary/Relaxation
pps. of GDP
Economic outlook for EA and EU
51
Fiscal stance projections for 2023 are very heterogeneous across countries (see Graph
I.2.52). The fiscal stance is set to range from a contractionary stance of more than 4% of GDP in
Hungary to an expansionary stance of more than 6% in Slovakia. Primary current expenditure
financed by the national budgets (net of discretionary revenue measures) is expected to provide
contractionary or expansionary contributions to the 2023 fiscal stance almost evenly across EU
countries, mainly due to the opposite change (decrease or increase) in energy support measures
relative to 2022. Other capital expenditure is set to provide contractionary contributions of more
than 2% of GDP in Italy and Hungary in 2023, after the sizeable expansions recorded in 2021-22.
Finally, in the majority of Member States, spending financed by RRF grants and other EU funds is
projected to provide a further expansionary contribution in 2023. Almost all EU countries are set to
have a contractionary fiscal stance in 2024, based on unchanged policies (Graph I.2.52). This is
mainly due to the expected phasing out of the energy support measures.
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
SK BG LU SI EE BE NL LV FI HR LT PL PT DK ES EL CY SE IE MT DE FR RO AT CZ IT HU EA EU
Graph I.2.52: Fiscal stance in 2023 and 2024 across Member States
Nationally financed primary current expenditure contribution, 2023 Nationally financed investment contribution, 2023
Other capital expenditure contribution, 2023 RRF grants and EU funds contribution, 2023
Fiscal stance, 2023 Fiscal stance, 2024
Contractionary/ Consolidation
Expansionary/ Relaxation
% of GDP
3. RISKS
53
The balance of risks to the growth outlook tilts back to the downside. While the forecast
for the EU economy has not changed substantially compared to the previous Winter interim
Forecast, downside risks have increased.
Risks to inflation are skewed to the upside and relate to persistence in core inflation.
Core price pressures could turn out more sticky if wages accelerate more than currently projected,
and without adjustment in profit margins. Strong demand for (contact-intensive) services would
strengthen this risk. Delays or asymmetries in the transmission of changes in commodity prices to
consumer prices, including on the core items of the consumption basket, would also protract core
price pressures.
Higher-than-expected inflation persistence would lead to a stronger reaction of
monetary policy, with broad macro-financial ramifications. Additional tightening of
financing conditions could come from a surge in risk aversion following the banking turmoil
originated in the US. It would weigh on investment and consumption (the latter particularly in
Member States where variable mortgage interest rates prevail and/or households rely heavily on
consumer credit). Given the past large increases in house prices, residential property in some
Member States may undergo sharper-than-expected price corrections. Commercial real estate,
already hard hit by the pandemic crisis, is particularly vulnerable. The adjustment to the high
interest rate environment also carries risks for heavily indebted households and firms, with
potential negative impact on the banking sector. In this fragile conjuncture, the old-standing risks
of fragmentation in the euro area/EU through the sovereign bond market could increase, especially
as markets adjust to the retreat of central banks as main buyers.
In the context of renewed market stress, policy consistency has become even more
important. An expansionary fiscal stance with untargeted support measures would add pressure
on central banks to step up monetary policy tightening.
With successful energy supply diversification and gas demand reduction, the threat of
outright shortages has significantly abated, but the evolution of prices remains highly
uncertain. A full stop of Russian pipeline flows to the EU, unfavourable weather conditions for the
generation of alternative energy sources, as well as above/below-average temperatures raising
energy consumption in the summer/winter, are among the factors that could reignite price
pressures on gas and electricity. In contrast, benign weather conditions and ample power
generation from renewables may push prices below the assumptions in this forecast.
Upside risks to growth could materialise if domestic demand turns out stronger and
inflation falls faster. Headline inflation could decline faster if wholesale energy prices fall below
the levels suggested in the current, relatively stable, futures curves; or, if the lower wholesale
prices are passed through more swiftly to consumers. Activity could pick up more strongly if
demand from China following its post-COVID reopening surprises on the upside.
uncertainties following the banking sector turmoil or related to wider geopolitical
tensions. In the US, the risk of policy miscalibration has increased with the recent turmoil in the
banking sector, potentially affecting EU financial conditions. Moreover, failure to reach a timely
agreement on the US debt ceiling could have significant negative consequences for the US
economy, with global spillovers. Fragmentation of global trade, also related to increasing
geopolitical tensions, is an additional downside risk for the global economy, potentially entailing
significant economic costs for the EU. Last, but not least, the fast pace of global monetary
tightening over the past year has also exposed debt vulnerability in some emerging market
Ukraine.
4. SPECIAL ISSUES
55
4.1. MEDIUM-TERM PROJECTIONS OF POTENTIAL GDP GROWTH IN TURBULENT TIMES
The large shocks that have hit the EU economy in recent years and the policy responses
have increased uncertainty about future growth. The last three years have been marked by
intense, mostly temporary, supply and demand shocks. To confront the negative effects of the
pandemic and the war-induced disruptions, massive policy initiatives have been deployed by the
EU and its Member States. These effects come on top of the pre-existing pressure on future
potential economic growth from ageing and the secular slowdown of total factor productivity.
Changes in the pattern of globalisation, production methods and household behaviour could also
shape potential output well beyond the current decade.
This special issue analyses the extent to which projections of potential growth up to
2027 have changed in view of the various shocks affecting the EU economy. The
assessment follows two approaches:
•
the 5- s estimated through the
production function approach of the European Union Commonly Agreed Methodology (EUCAM),
with previous forecast vintages since the Autumn 2019 Forecast (AF19).
• Second, we single out the energy crisis and quantify the impact of higher oil and gas prices on
potential growth rates through the lens of a large general equilibrium model that explicitly
includes energy as an imported intermediate input.
Return to pre-COVID potential output growth in the near term
Potential output growth projections up to T+5 (2027) illustrate the trajectory of
potential growth if the labour, capital and total factor productivity trend growth rates
that have emerged over the years running up to the end of SF23 (i.e. up to 2024) were
to persist over the medium to long run.
(
32
)
(
33
)
In the current forecast, potential GDP growth rates for the EU are projected to remain
around 1.5% during the T+2 forecast period, 2023-24 (see Graph I.4.1), after recovering
from around 1.2% in the acute phase of the COVID-19 pandemic, i.e. 2020-21. After 2024,
estimated potential growth rates fall, back to 1.2% by 2027. The main driver of this drop is the
reduced contribution from labour input, which tapers down in 2026 and even turns negative in
2027 as the temporary increase of working-age population from people fleeing the war in Ukraine
ends and demographic ageing again dominates developments in labour supply. The contribution of
capital accumulation to potential GDP growth picked up in 2022 and is expected to remain
(
32
)
T+5 baseline projections are calculated using a very stable methodology endorsed by the EU Member States back in
2014 (for a technical description of the methodology s Output Gap Estimation Using
the European Union's Commonly Agreed Methodology: Vade Mecum and Manual for the EUCAM Software Discussion
Paper 148, European Commission). They are based on the assumption of no policy change and are by no means a
forecast they are simply a non-judgemental, rules based, extrapolation of recent developments in the key structural
growth drivers for the individual Member States. A number of technical adjustments were introduced in 2020 to
smoothen the overall potential output estimations given the large, but temporary, shifts in hours worked linked to the
COVID-19 pandemic. By cushioning the labour market impact (in line with the widespread resort to short-time working
schemes), these adjustments avoided excessively pro-cyclical movements of estimated potential growth.
(
33
)
The Spring 2023 Forecast covers the period until 2024 (T+2). The standard T+5 - T+10 methodology extrapolates the
T+2 results using fixed (mechanical) rules. Each component of the production function is extended by means of auto-
regressive processes (AR) beyond the T+2 forecast, whereby future projections are linked to historical past trends as
well as to the short-term forecasts from country experts. Trend unemployment is additionally determined by long-term
Finally, the output gap is
assumed to close in T+5 (2027). The mechanical extension implies that several risks (e.g. possible long-term labour
market scarring) beyond 2024 are not taken into account.
European Economic Forecast, Spring 2023
56
relatively elevated in the coming years, also reflecting investment related to Next Generation EU
and green investment. The contribution of total factor productivity (TFP) growth is projected to
recover somewhat, increasing to 0.8 pps. in 2027.
(
34
)
The assessment of the impact of the
against Ukraine (and the related policy
responses) as incorporated in the SF23
projections for 2023 and 2024 also affect
(
35
)
Hence, a comparison with the pre-COVID or pre-
war projections can provide a rough estimate of
the cumulative effects of these shocks. In this
potential GDP growth based on the SF23 with
projections based on previous forecast vintages,
focusing on the time span 2023-27.
(
36
)
There are important changes in the relative
contributions of production inputs to
potential GDP across the forecast vintages.
Graph I.4.2 shows the annual average
contributions of the production inputs for the
years 2023-27. The average potential GDP growth
based on the SF23, at 1.4%, is only slightly above
the corresponding projection in the autumn 2019
vintage (1.3%). However, drivers differ
significantly. The TFP projection is now lower (by
0.2 pps.), capturing the impact of higher energy
prices and the subsequent general increase in
inflation on productive capacity.
(
37
)
Lower TFP is
compensated by a higher contribution of labour, by around 0.3 pps. Increasing immigration, a
buoyant labour market and recent reforms of the labour market and pension systems in some
Member States have all contributed positively to labour supply, when compared with the earlier
AF19 projections.
Repeating the same exercise at the level of the EU Member States reveals common
trends. 15 countries out of the 27 show lower average potential growth rates for the period
2023-
(
34
)
It should be noted that the TFP projections are surrounded by a high degree of uncertainty, since it is too early to
predict the effects of key drivers, such as a declining trend of research productivity (see for example Bloom, N., Jones,
C.I., Reenen, J. V. and Webb, M. (2020). "Are Ideas Getting Harder to Find?." American Economic Review 110 (4)), the
enhanced digitalisation triggered by COVID-19 (see for example Döhring, B., Hristov, A., Maier, C., Röger, W. and Thum-
Thysen, A. (2021). COVID-19 acceleration in digitalisation, aggregate productivity growth and the functional income
International Economics and Economic Policy 18), the possible effects of new technologies, or the
transition to green energy networks and technologies (
).
(
35
)
The Spring 2023 Forecast projects GDP until 2024 (T+2). These country-desk projections include the effects of the
NGEU funds (incl. RRF) spent over this period. The standard T+5 - T+10 methodology extrapolates the T+2 results using
fixed (mechanical) rules. Each component of the production function is extended by means of auto-regressive
processes (AR) beyond the T+2 forecast, whereby future investment projections are linked to historical past trends as
well as to the short-term forecasts from country experts. Several components are additionally determined by long-term
factors). Finally, the output gap is assumed to close in T+5 (2027). The mechanical extension implies that several risks
(e.g. possible long-term labour market scarring) beyond 2024 are not taken into account.
(
36
)
For the previous forecast vintages, the comparison uses the T+6, T+7 or T+8 projections.
(
37
)
TFP is generally interpreted as the efficient use of capital and labour. However, as a residual in the production function
it also captures factors not entering elsewhere. In the subsequent section, we will attempt to disentangle the impact of
the energy price shock using a model in which energy is explicit.
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Graph I.4.1: Potential GDP growth breakdown, EU
Charges in Hours (per Empl) Contribution
Labour (persons) Contribution
Capital Accumulation Contribution
TFP Contribution
Potential Growth (arnual % charge)
forecast and
projections
%
0.0
0.0
0.0
0.0
0.0
0.5 0.5
0.5
0.4
0.5
-0.1 -0.1
0.1
0.2
0.2
0.9 0.9
0.7
0.6
0.7
1.3 1.3
1.4
1.2
1.4
-0.5
0.0
0.5
1.0
1.5
2.0
AF19 AF21 SF22 AF22 SF23
Graph I.4.2: Potential GDP breakdown, annual averages
2023-27, EU
TFP Contribution
Labour (persons) Contribution
Capital Accumulation Contribution
Charges in Hours (per Empl) Contribution
Potential Growth (arnual % charge)
Pandemic
War
Inflation
Economic outlook for EA and EU
57
diminished for a large majority of countries. Many of the Member States featuring the largest
reductions in the TFP contribution are among the countries most exposed to the economic impact
of the war in Ukraine, given trade links and the degree of energy dependency from Russia, as
reported in the vulnerability matrix of the Spring 2022 Forecast.
(
38
)
In contrast, labour
contributions in the SF23 have improved in most Member States.
A theory-grounded structural macroeconomic model allows one to single out the impact of
individual shocks and to quantify their impact on potential GDP growth.
A model-based assessment of the energy price shock
This section takes a step further by isolating the impact of energy price shocks on the
The previous section assessed the cumulative impact of
the pandemic and energy price shocks on potential growth. The Global Multi-Country model (GM),
an estimated Dynamic Stochastic General Equilibrium (DSGE) model of the euro area, allows to
single out the impact of the energy crisis on potential GDP growth rates.
(
39
)
The potential output and output gap calculations of the GM model are broadly in line
with the European Union Commonly Agreed Methodology. In particular, the GM model also
follows the production function method in that it depends on technology, labour and capital
inputs.
(
40
)
Yet, key differences remain. Importantly, potential labour in the two models is estimated
using different approaches. The GM model employs a structural general equilibrium model,
estimated using Bayesian techniques
(
41
)
, while EUCAM uses a combination of structural and more
mechanical univariate models. Unlike the EUCAM, the GM model also explicitly includes observed
and expected prices for oil and natural gas
(
42
)
and models energy as an imported intermediate
input with limited substitutability.
Graph I.4.3 shows that the output gap estimates, a business cycle indicator expressed as
the deviation of actual from potential output, based on the EUCAM and GM model
display a similar pattern over time. After the Great Financial Crisis (2008-09), the GM
estimate turned positive in the same year as the EUCAM estimate, although the former shows a
slightly more positive profile that starts before the COVID-19 crisis. Both estimates show a
significant drop during the pandemic and then a quick recovery in subsequent years.
(
38
)
Institutional Paper 173, Box 1.2.2.
(
39
)
The Global Multi-Country (GM) DSGE model has been developed by DG ECFIN and the Joint Research Centre of the
European Commission. A detailed description of the GM model can be found in: Albonico, A., L. Calès, R. Cardani, O.
Croitorov, F. Di Dio, F. Ferroni, M. Giovannini, S. Hohberger, B. Pataracchia, F. Pericoli, P. Pfeiffer, R. Raciborski, M. Ratto,
W. Roeger and L. Vogel (2019). The Global Multi-Country Model (GM): an Estimated DSGE Model for the Euro Area
Countries ECFIN Discussion Paper No. 102, European Commission.
(
40
)
The assumed production function in GM includes fixed costs and public capital as a separate productivity-enhancing
input. Public capital represents a small share of total capital, therefore playing a relatively small role in total production
and the accumulation of total capital is broadly more in line with the EUCAM specifications. The depreciation rate in the
capital accumulation functions is constant.
(
41
)
Potential labour input equals the amount of hours worked in the absence of nominal and real wage rigidity as in J. Galí
Journal of European Economic Association 9 (3).
(
42
)
The GM model is a structural macro-model in the New-Keynesian tradition with microeconomic foundations derived
from utility and profit optimisation and including frictions in goods, labour and financial markets. The model is tightly
linked to economic data comprising more than 30 historical times series from national accounts (such as GDP,
consumption, price deflators, etc), trade data and uses s for 2023-24 for a large
subset of them, as well as market-based expectations for energy goods like gas and Brent oil. The driving forces
(shocks) that would fit these data will also predict the unobserved variables such as the total hours trend.
European Economic Forecast, Spring 2023
58
Energy prices affect potential growth
through capital accumulation and medium-
term labour market dynamics.
(
43
)
Higher
production costs due to higher energy prices can
pressure liquidity-constrained firms to cut
investment. Moreover, energy prices significantly
demand for goods and services. These effects
directly and indirectly slow down capital stock
accumulation. The impact of energy shocks on
medium-term labour market dynamics depends
on structural features such as the speed of real
wage adjustment. Energy price increases bring
down real wages due to the delayed adjustment
of nominal wages. However, in the medium term, workers and trade unions renegotiate the wages
(
44
)
In the GM,
w their reservation wage.
(
45
)
, higher energy
prices can prompt a moderate increase in labour force participation rates depending on the
degree of real wage rigidities or the strength of consumption smoothing.
(
46
)
Given that the capital
accumulation channel builds up more slowly, this labour supply channel might dominate. In the
medium run, however, the negative impact from decreased investment and a smaller capital stock
dominates.
Significant increases in energy prices in
2022, especially for gas, have reversed the
positive trend of energy prices contribution
on potential growth coming from lower
prices before and during the COVID-19 crisis.
Graph I.4.4 shows the slow build-up of the positive
impact of energy price shocks (grey bars) lasting
until 2022.
(
47
)
Based on the external assumptions
and GM model estimates of the SF23, this trend
was overturned following the dramatic increase in
gas and oil prices. According to the model, the loss
in real income has slightly increased potential
output in 2022 via increased labour force
participation. However, in the subsequent years, the capital accumulation channel dominates and
the negative impact of higher energy prices on domestic demand and business activity reduces
potential GDP growth cumulatively in 2023 and 2024 by 0.15%. As energy prices remain above
historical levels over the forecast horizon, despite the ongoing significant decrease from the 2022
peak, the negative impact of energy on potential growth is further amplified in 2024.
(
43
)
Energy prices can also affect the total factor productivity trend. However, this channel is absent in the GM model as
trend productivity growth is assumed to be exogenous. To avoid further departures from the EUCAM potential output,
the latter is observed with a measurement error using EUCAM TFP trend estimates.
(
44
)
The degree of bargaining power is captured by the historically estimated real wage rigidities.
(
45
)
Formally, in the model, high estimated habit formation imply preferences to smooth
consumption over time.
(
46
)
For further discussion of the importance of real wage rigidities in the transmission of negative supply shocks, see also
F. Nucci and M. Riggi (2018). . Journal of Macroeconomics 55, I.
Cairo, S. Fujita and C. Morales- The cyclicality of labor force participation flows: The role of labor
supply elasticities and wage rigidity Review of Economic Dynamics 43, and O. Blanchard and J. Galí (2010).
NBER Chapter in
International Dimensions of Monetary Policy.
(
47
)
In Graph 4, the solid blue line shows the EUCAM estimated potential output growth. The grey bars show the contribution
of the energy shock to potential GDP growth from the long-run trend (average) growth. Bars above (below) the
horizontal axis indicate positive (negative) contributions in a given year.
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
02 04 06 08 10 12 14 16 18 20 22 24
Graph I.4.3: Euro area output gap
EUCAM GM
%
0
0
0
0
0
0
0
0
0
0
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
2019 2020 2021 2022 2023 2024
Graph I.4.4: Euro area potential GDP growth and the
contribution of the energy prices
Energy EUCAM
%
Economic outlook for EA and EU
59
The model-based potential output estimates are stylised and considerable uncertainty
surrounds this analysis. Hence, there are several caveats to keep in mind. First, comparing the
EUCAM results from Autumn 2021 and Spring 2022, a significant proportion of the negative
impact on potential output shows up as a TFP effect. By contrast, the GM model does not feature a
pass-through of various economic drivers on production technology and, therefore, it remains silent
on the impact of energy shocks on trend TFP. Second, energy prices have exhibited large swings in
the last year and are still surrounded by considerable uncertainty as regards its future magnitude
and persistence. Adverse macroeconomic effects also heavily depend on substitution possibilities
to reduce the demand of imported fossil fuels.
(
48
)
4.2. THE NEW CANDIDATE COUNTRIES INCLUDED IN THE FORECAST
Ukraine and Moldova were granted candidate status for EU membership by the European Council
in June 2022
(
49
)
. Bosnia and Herzegovina followed suit in December 2022. This special issue
provides an overview of the structural features, recent performance of and outlook for these three
economies. The challenges related to statistical gaps and, in the specific case of Ukraine, to
assessing economic developments for a country at war, warrant a more qualitative approach to
ic forecasts. As from autumn
enlargement-related workstreams, the intention is to publish detailed forecasts as for the other
candidate countries (the war situation in Ukraine permitting).
(
50
)
4.2.1. UKRAINE
Ukraine is a lower middle-income country of more than 40 million people. In 2021, GDP
economic development had been held back by a somewhat uneven implementation of structural
reforms across different areas, reflecting persistent lack of political consensus, regular
interference from vested interests, a high degree of corruption, chronically low levels of
investment, and territorial disputes also linked to the 2014 illegal annexation of Crimea by Russia.
It must be underscored that while this section is based primarily on pre-war data, the tremendous
forecasting subject to strong uncertainties. At the same time, the country has demonstrated
remarkable resilience during the war, and efforts towards joining the EU, having been granted
candidate country status on 23 June 2022, should improve prospects for Ukraine.
Compared to the EU average, the Ukrainian economy is less diversified and with a large
imprint of the state in the economy. A large share of its value added comes from agriculture
(12%, EU average: 1.3%), low-tech manufacturing (12%) and mining (8%). With more than 3,500
state-owned enterprises, accounting for one tenth of output and about 18% of employment, the
reflected in its relatively low ranking in the Global Competitiveness Index (rank 84 compared to
ranks 51 to 62 for the three worst-performing EU Member States).
In the years before the war, the Ukrainian economy had progressively increased trade
with the EU. Exports in goods and services as a share of GDP had contracted by almost a quarter
(
48
)
The analysis uses historically estimated parameters for the elasticity of substitution between energy and other inputs,
approximately 0.4 for both consumption and production inputs. A sensitivity analysis shows that the adverse impact
could be larger if further substitution proves more difficult.
(
49
)
See European Council conclusions of 23 June 2022 and European Council conclusions of 15 December 2022.
(
50
)
The forecasts for Ukraine and Moldova presented in this publication refer to the territories under the control of the
national authorities, in line with the approach followed by the national statistical authorities. In practice, this means
that for Ukraine the data, as well as the forecast, exclude the illegally-annexed Crimea, the city of Sevastopol and a
part of the non-government controlled areas of the Donetsk and Luhansk regions. As regards to Moldova, the data and
the forecast exclude the Transnistria region.
European Economic Forecast, Spring 2023
60
since 2015 to 41% of GDP in 2021. Yet, economic integration with the EU progressed further
thanks to the implementation of the Association Agreement/Deep and Comprehensive Free Trade
Agreement. The share of exports to the EU, mostly agricultural goods, metals and minerals,
increased from 28% in 2015 to 36% in 2021. The share of imports from the EU, which comprised
primarily machines, chemicals and minerals, also strengthened from 36% in 2015 to 41% in 2021.
The workforce is overall well-educated, but the labour market is characterised by
substantial informal employment. Sizeable government spending on education (5.7% of GDP in
2021 compared to EU average of 4.8%) and a ratio of gross enrolment in tertiary education of
above 80% suggest an overall well-educated workforce. Some estimates put the size of the
informal sector as high as 44% of GDP and almost 20% of all employed in 2021. The activity rate
averaged around 62% (56% for women) between 2014 and 2021 (EU: 73%, 68% for women),
while the unemployment rate fluctuated around 9% prior to the Russian war of aggression.
Inflation had come down following the adoption of a medium-term inflation-targeting
framework. Since 2016 and up until the outbreak of the war, when it was temporarily suspended,
the National Bank of Ukraine had successfully managed to set a 5% medium-term inflation-
targeting framework with a flexible exchange rate regime. Confidence in the national currency -
the hryvnia - had improved, as its value on foreign exchange markets stabilised. Inflation was at
2.7% in 2020 before surging to 9.4% in the wake of the post-pandemic adjustments.
Until the outbreak of the war, public finances were also on a solid footing. The
government had followed an ambitious fiscal consolidation that resulted in a public deficit of
around 2% of GDP on average between 2015 and 2021. Supported by strong nominal GDP growth,
the public debt ratio declined to below 50% of GDP in 2021.
aggression, has caused the economy to contract by almost a third in 2022. The massive
human exodus of more than 7 million people has partly reversed lately, but about 4 million people
are still under temporary protection abroad. More than 2 million internally displaced persons have
also returned to their places of origin.
The economy has proven resilient despite the war. Population displacement, subdued
business activity and severe output contraction in the regions with active combat have resulted in
high inflation and soaring unemployment. In 2022, private consumption and investment are
estimated to have dropped by about 30% and 35% respectively, resulting in an overall GDP
contraction of 29.1%. Moreover, Russian attacks on the power grid in late 2022 and early 2023
have destroyed or seriously damaged half of the electricity infrastructure. Still, a stronger-than-
expected resilience of the critical energy infrastructure, the solidarity initiatives in support of
stabilisation of the economic output in 2023. Under the assumption that the conditions are in place
for a gradual increase in early reconstruction efforts as from mid-2024, real GDP is expected to
rebound moderately that year. Inflation is likely to remain elevated, around 20%, throughout 2023
and to decline progressively in 2024, continuing to erode real incomes and wealth. The government
plans a fiscal deficit (excl. grants) of 28.2% of GDP in 2023, resulting in a projected public debt of
81.5% of GDP. Unemployment is set to stay at around 15% in 2023 and to decrease in 2024 as
reconstruction activity picks up. The current account is projected to remain positive at 1.7% of GDP
in 2023 before returning to a small deficit in 2024. The outlook is, however, subject to
extraordinary uncertainty and critically depends on the evolution of the war.
Formidable efforts will be needed to attract investment and launch a full-scale
reconstruction, the cost of which has been recently estimated at USD 411 billion by the
World B
(
51
)
An ambitious reform programme
will also be needed to align the country with its European path. Reducing the much-increased role
(
51
)
World Bank (2023). Ukraine Rapid Damage and Needs Assessment: February 2022 - February 2023
(English). Washington, D.C.: World Bank Group.
Economic outlook for EA and EU
61
of the state in the economy, solving the endemic issue of corruption, improving the efficiency of
the judiciary and strengthening the enforceability of property rights are among the main
challenges and can, if successfully pursued, enable the modernisation of the economy. Security
guarantees and an improved business environment favourable to competition are prerequisites for
making Ukraine attractive to foreign private investors and, ultimately, for the longer-term
sustainability of the reconstruction effort.
4.2.2. MOLDOVA
Moldova is a lower middle-income economy with a population of approximately 2.5
million. Its GDP per capita stood at around 30% of the EU average in terms of purchasing power
parity in 2021. During the last decade (2013-22), Moldova recorded economic growth of 3.1% per
year on average and weathered several economic crises, supported by broadly sound
macroeconomic policies. Prior to 2022, the National Bank of Moldova had been generally
successful in keeping inflation within the target range set at 5% +/- 1.5 percentage points. Public
finances have been stable, with a low deficit, at about 2.3% of GDP on average over 2013-22, and
a low level of debt (36% of GDP in 2022), most of which has been extended by official creditors
on concessional terms. However, frequent changes in government, persistent rule of law
weaknesses and continued perception of pervasive corruption hampered investment, in particular
from abroad.
on the agricultural sector.
1.3%) and the informal subsistence agriculture represents another 11% of GDP. The
manufacturing sector is relatively small, centred around agriculture, including food processing and
agricultural machinery, as well as low-tech manufacturing, such as textiles and apparel. State
influence remains important in key sectors, including in telecommunications, energy and transport,
weighing on their efficiency. State-owned enterprises accumulate assets worth about 26.5% of
86, closely behind Ukraine and much weaker than the three worst-performing EU Member States),
hinder a more efficient allocation of resources that could underpin higher living standards. The
informal sector accounts for an estimated 27% of GDP.
Moldova is a relatively open economy. The EU is Mold
for about 60% of its total exports and 44% of its total imports in 2021. Within the EU, Romania is
the main destination of trade. Food and agricultural products, as well as crude materials and
textiles, make up for
low value-
2012-22 and it increased in recent years due to the protracted energy crisis. It has been financed
largely by substantial remittances and financial transfers.
While
unemployment has been low at around 3%, the very low employment rate of 40% in 2022 (among
those aged 15 years and above; EU 15 64 years: 66.2%) reflects low participation in the labour
market by the older cohorts and by people working abroad or willing to work only abroad. The
Table I.4.1:
2019 2020 2021 2022 2023 2024
3.2 -3.8 3.4 -29.1 0.6 4.0
Exports (goods and services)
7.3 -5.8 -8.6 -42.4 1.5 5.3
Imports (goods and services)
5.7 -6.4 14.2 -18.5 3.0 6.2
Trade balance (goods) (a)
-9.3 -4.3 -3.3 -12.7 -11.9 -11.8
Current-account balance (a)
-2.7 3.3 -1.9 4.3 1.7 -0.1
(a) as a % of GDP.
Main features of country forecast - Ukraine
Annual percentage change
GDP
European Economic Forecast, Spring 2023
62
inflow of people fleeing Ukraine contributed to a slight increase in the employment rate in 2022
despite the deep economic downturn, but this impact is likely to abate in the coming years.
Ukraine, further aggravated by a drought and the protracted energy crisis. Real GDP
Moreover, war-related uncertainty also led to a substantial fall in investment. On the fiscal side,
the general government budget deficit widened to 5.5% of GDP on the back of increased spending
on energy subsidies for vulnerable households and support for people fleeing Ukraine. On the
external side, the current account deficit widened to over 15% of GDP, driven by high energy and
food pri
exports in 2021).
In 2023, the economy is set to mildly recover, with a stronger rebound expected in
2024. The outlook is based on improved terms of trade, notably the easing of energy prices, and
consumption growth. Lower energy prices are set to contribute to a considerable reduction of
to the steady flow of remittances. Private consumption is thus projected to be the main driver for
growth, followed by still strong public consumption and a gradual recovery of investment,
especially in 2024. Normal weather conditions are expected to contribute to a rebound in
agricultural output. Compared to the relatively strong performance in 2022, which was largely on
account of re-exports of agricultural and other products, export growth is projected to moderate.
Coupled with a recovery of domestic demand, the contribution of net-exports on growth is thus set
to remain negative.
High general government deficits are driving up the debt-to-GDP ratio over the forecast
horizon. The general government deficit is expected to remain high in the near term, on account
of continued fiscal support for the most vulnerable and the projected increase in public investment.
This, coupled with low GDP growth, is set to increase the debt ratio.
However,
the reorientation of trade flows, additional trade facilitation agreements with the EU and growth
among its trading partners are set to contribute to a gradual narrowing of the current account
deficit. The risks related to the forecast remain tilted towards the downside, largely on account of
the geopolitical situation.
4.2.3. BOSNIA AND HERZEGOVINA
Bosnia and Herzegovina is a lower-middle income economy with a population of 3.5
million.
economic development over the last decade has been marked by stable, but relatively subdued,
Table I.4.2:
2019 2020 2021 2022 2023 2024
3.6 -8.3 13.9 -5.9 2.8 4.1
Contribution to GDP growth: Private consumption
3.6 -6.4 14.2 -3.3 2.5 3.3
Gross fixed capital formation
2.8 1.3 0.5 -1.6 0.8 1.5
Net exports
-1.0 0.8 -6.0 -1.5 -1.3 -1.3
Employment
9.5 -4.2 1.7 1.0 0.6 0.4
Unemployment rate (a)
5.3 3.9 3.3 3.2 3.1 3.0
4.8 3.8 5.1 28.7 15.4 6.4
Current account balance (b)
-10.3 -9.3 -15.1 -15.8 -13.7 -12.2
-1.5 -5.3 -1.9 -5.5 -5.5 -4.2
28.8 36.6 33.1 36.2 37.3 38.7
General government balance (b)
General government gross debt (b)
Main features of country forecast - Moldova
(a) as % of total labour force. (b) as a % of GDP.
Annual percentage change
GDP
National index of consumer prices
Economic outlook for EA and EU
63
ces (of some 10% of GDP).
Prior to 2022, annual inflation was very low, at 0.3% on average during the previous 10 years. The
exchange rate regime is a currency board arrangement with the euro as the anchor currency, which
has helped to contain inflationary
deficit of 0.4% of GDP during the last 10 years (2012-21), which is also reflected in a rather low
level of public debt of about 34% of GDP in 2021, of which half is held by official external
creditors on concessional terms. Persistent political uncertainties and stalemates, a weak rule of
law and low progress with economic reforms had a negative impact on domestic and foreign
investment, weighing on the economy.
The economy of Bosnia and Herzegovina is skewed towards agriculture and state-owned
enterprises play a significant role.
footprint of state-owned enterprises, and a low ranking in the 2019 Global Competitiveness Index
(rank 92, weaker than Ukraine and Moldova and below the three worst-performing EU Member
States). The informal sector remains large, accounting for an estimated one third of GDP. The
labour market is characterised by a low employment rate of around 40% (EU average: 73%) and
high unemployment rates, especially among young people (currently at 15% and 36%,
respectively). The labour force is shrinking, largely due to persistent labour emigration.
Bosnia and Herzegovina is less open than similarly sized economies. The value of goods
and services exports represents some 30-40% of GDP, compared to 70-80% of GDP for EU
Member States with a similarly sized population. Commodity exports mainly consist of electricity
and manufactured products, such as car seats, wires and furniture. The EU is Bosnia and
the main export markets. The current account deficit averaged 1.4% of GDP during the past ten
years (2013-22), while trade deficits were substantial (averaging -16.3% of GDP over the same
Economic activity slowed down in 2022, reflecting a deteriorating international
environment and accelerating inflation. After averaging 1.8% over the period 2011-20, real
GDP growth rose to 7.4% in 2021 amid the post-pandemic rebound, but slowed down to 4% in
2022. Due to
limited direct impact on trade. However, higher prices for imported energy and primary
commodities contributed to inflationary pressures. At the same time, external demand decelerated,
though from a high level. The main drivers of growth in 2022 were exports, gross investment (in
particular inventories) and private consumption. The labour market remained resilient in 2022, with
employment growth of 2.3% and the unemployment rate dropping to 15.4%. The current account
deficit widened to 4.5% of GDP, largely due to higher import prices and weaker external demand.
The outlook for 2023 and 2024 is based on an expected moderate improvement in the
the end of the forecast period, while domestic
demand is set to be affected by weak disposable income growth and persistent
domestic political tensions.
revenues are likely to recover to pre-pandemic levels. Thanks to the projected decrease in
international prices for energy and raw materials, domestic price pressures are set to ease,
exports and private consumption are expected to become the main drivers of growth towards
2024. Due to relatively moderate export growth, deficits in trade and current account balances are
set to remain at their comparatively high level.
The increase in employment is forecast to remain moderate, which should limit the
reduction in the unemployment rate. However, continued labour emigration will likely support
growth potential. Public finances are set to benefit from inflation-driven high-revenue growth, in
particular in 2023. However, decelerating inflation and the local elections could lead to lower than
planned revenue and higher spending, and thus a higher deficit in 2024. The debt ratio is forecast
European Economic Forecast, Spring 2023
64
to decrease slightly in 2023, benefiting from strong nominal growth and a low deficit, while in
2024 a higher deficit would lead to a slight increase in the debt ratio. The risks to the forecast are
mainly related to the international environment (both upside and downside) and the domestic
political situation, which could also turn out to be more growth-supportive than currently assumed.
Table I.4.3:
2019 2020 2021 2022 2023 2024
2.9 -3.0 7.4 3.9 1.5 2.3
Contribution to GDP growth: Private consumption
1.7 -2.5 2.9 3.3 1.0 1.3
Gross fixed capital formation
1.3 -1.0 1.1 1.4 1.2 1.2
Net exports
-0.5 1.0 -1.4 -2.9 0.5 -0.7
Employment
2.2 -6.9 -1.9 1.0 0.7 1.5
Unemployment rate (a)
: : 17.4 15.4 14.5 14.0
0.6 -1.1 2.0 14.0 7.0 4.0
Current account balance (b)
-2.6 -3.2 -2.4 -4.6 -3.8 -4.4
1.9 -5.2 -0.3 -1.0 -0.3 -0.8
32.1 36.0 34.4 30.5 29.5 30.0
Main features of country forecast - Bosnia and Herzegovina
(a) as % of total labour force. (b) as a % of GDP.
Annual percentage change
National index of consumer prices
General government balance (b)
General government gross debt (b)
GDP
5. BOXES
65
(Continued on the next page)
Box I.5.1: Some technical elements behind the forecast
The cut-off date for taking information into account in this European Economic Forecast was 28 April
2023. Ad-hoc assumptions relating to, e.g. the geo-political situation, are detailed in Box I.1.1.
Exchange and interest rates
Nominal exchange rates are kept constant over the forecast horizon at the level recorded during the
reference period (see Table 1 in this box and Table 31 in the Statistical Annex). Assumptions for interest
rates are market-based. Short-term interest rates for the euro area are derived from futures contracts.
Long-term interest rates for the euro area, as well as short- and long-term interest rates for other
Member States, are calculated using implicit forward swap rates, corrected for the current spread
between the interest rate and swap rate. In cases where no market instrument is available, the fixed
spread vis-à-vis the euro area interest rate is taken for both short- and long-term rates.
Commodity prices
Assumptions for Brent oil, gas and electricity prices are based on futures markets, using the average
over the 10-day reference period between 12 and 25 April.
Trade policies and assumptions
For trade policy, this forecast pencils in only the measures that have been implemented until the cut-
off date and includes bans on specific exports and imports (see https://eu-solidarity-
ukraine.ec.europa.eu/eu-sanctions-against-russia-following-invasion-ukraine_en).
ESA 2010
The forecast is based on the ESA 2010 system of national accounts for all Member States, the EU and
the euro area aggregates.
Calendar effects on GDP growth and output gaps
The number of working days may differ from one year to another. The Commission s annual GDP
forecasts are not adjusted for the number of working days, but quarterly forecasts are. The working-
day effect in the EU and the euro area is estimated to be limited in 2023 and 2024, implying that
adjusted and unadjusted annual growth rates differ only marginally (by up to ±0.1 pps.), but it may be
significant in the case of some Member States. Estimations of potential GDP and output gaps are not
adjusted for working days. Furthermore, since the working-day effect is considered temporary, it is not
expected to affect cyclically-adjusted balances.
Inclusion of new candidate countries
Following their application for EU membership in spring 2022, the European Council granted Ukraine,
Bosnia and Herzegovina and Moldova candidate country status in June 2022. These countries are
included in the forecast, in the Special issue he new candidate countries included in the forecast
Table 1:
Technical assumptions
2021 2022 2023 2024 2022 2023 2024
3-month EURIBOR (percentage per annum) -0.5
0.3 3.3 3.3 0.2 3.1 3.0
10-year government bond yields (percentage per annum) (a) -0.4
1.1 2.4 2.4 1.2 2.3 2.4
USD/EUR exchange rate 1.18
1.05 1.09 1.10 1.04 0.98 0.98
GBP/EUR exchange rate 0.86
0.85 0.88 0.88 0.85 0.87 0.87
RMB/EUR exchange rate 7.63
7.08 7.50 7.56 6.98 7.11 7.11
JPY/EUR exchange rate 129.9
138.04 145.76 147.11 137.40 146.45 146.45
EUR nominal effective exchange rate (annual percentage change) (b) 1.30
-4.53 5.77 0.75 -4.30 -0.50 0.00
Natural gas (EUR/Mwh) (c) 47.1
131.9 48.0 55.4 134.8 146.5 110.3
Electricity (EUR/Mwh) (d) 107.2
260.3 130.7 161.4 265.6 396.1 248.8
Oil price (USD per barrel) 70.7
100.7 76.3 72.1 101.8 85.0 78.0
Oil price (EUR per barrel) 59.8
95.7 69.9 65.6 98.4 86.4 79.3
(a) 10-year government bond yields for the euro area are the German government bond yields.
(b) 42 industrial countries EU-27, TR CH NO US UK CA JP AU MX NZ KO CN HK RU BR. (c) ICE Dutch TTF. (d) GDP - weighted average of electricity prices in DE, FR, IT, ES,
NL, BE, AT.
Autumn 2022
Forecast
Spring 2023
Forecast
European Economic Forecast, Spring 2023
66
Box (continued)
The inclusion of the Recovery and Resilience Facility in the forecast
The macroeconomic and budgetary projections in the forecast include the impact of the
implementation of the Recovery and Resilience Facility (RRF). Unless mentioned otherwise, the forecast
includes the measures incorporated in the Recovery and Resilience Plans as submitted to the
Commission. The cash disbursement and expenditure profiles implicit in the forecast are consistent
with the time profile of milestones and targets as specified in the Plans and the relevant Council
Implementing Decisions, also taking into account implementation outcomes at the cut-off date of the
forecast. The update of the RRF maximum financial contribution of 30 June 2022 is reflected in the
forecast through the working assumption of a proportional adjustment of the cash disbursements in
the outer year of the Forecast (2024), without pre-judging the actual update and submission of the
national plans in line with Article 18(2) of the RRF Regulation. The working assumptions in the forecast
do not pre-judge the outcomes of future Commission and Council decisions.
the st
(https://ec.europa.eu/eurostat/documents/1015035/12618762/GFS-guidance-note-statistical-
recording-recovery-resilience-facility.pdf). In particular, this implies that, except for 2020, the
budgetary impact of any expenditure or other costs financed with non-repayable financial support
balance, while the actual loans by the RRF are recorded
Budgetary data and forecasts
The forecast incorporates validated public finance data up to 2022 as published in Eurostat s news
release 47/2023 of 21 April 2023.
Eurostat is expressing a reservation on the quality of data reported by France for the year 2022.
Eurostat, in close cooperation with the French statistical authorities, is clarifying the recording of the
capital increase by the State into the public energy company EDF (Électricité de France), as well as the
application of the super-dividend test for the dividends paid by some public corporations to the French
State. The deficit for 2022 might be underestimated by up to 0.2 pp of GDP.
-policy-c
revenue and expenditure trends and relationships in line with past policy orientations. This may also
include the adoption of working assumptions, in particular to deal with structural breaks. The no-policy-
change forecast includes all fiscal policy measures that imply a change to past policy orientations on
the condition that they are sufficiently detailed as well as adopted or at least credibly announced. For
2023 in particular, the annual budgets adopted or presented to national parliaments are taken into
consideration. The temporary emergency measures taken in response to COVID-19 crisis adopted in
2020, 2021 and 2022 are not treated as one-off and are thus reflected in the estimation of the
structural budget balance.
In line with , EU and euro area aggregates for general government balance and
publishes the consolidated figures (corrected for intergovernmental loans, including those made
through the European Financial Stability Facility), the projections in the forecast years 2023 and 2024
are published on a non-consolidated basis. To ensure consistency in the time series, historical data are
also published on the same basis. For 2022, this implies an aggregate debt-to-GDP ratio that is
somewhat higher than the consolidated general government debt ratio published by Eurostat in its
news release 47/2023 of 21 April 2023 (by 1.6 pps. in the EA20 and by 1.3 pps. in the EU).
PART II
Prospects by individual economy
Euro Area Member States
1. BELGIUM
70
A gradual recovery
Even though economic growth reached 3.2% in 2022, economic developments at the end of the
year were rather subdued. In a context of high inflation and uncertainty related to the extreme
volatility of energy prices, activity slowed down to quarterly growth rates of 0.3% and 0.1% in the
third and fourth quarters respectively.
However, economic activity rebounded already at
the beginning of 2023, with quarterly GDP growth
estimated at 0.4% in the first quarter of the year.
The automatic indexation of wages and social
benefits is set to continue to contribute to
maintaining the purchasing power of households,
especially as headline inflation is projected to
substantially slow down. Consequently, after a
strong performance in the last quarter of 2022,
private consumption is expected to remain
supportive in 2023 and 2024.
Strong cost pressures related to wage increases
and tighter financial conditions are projected to
continue weighing on business investment. Residential construction is expected to remain under
pressure from high financing costs, even though the increased needs for the energy transition are
set to play a positive role. In contrast, public investment is set to contribute positively with the
continued implementation of the Recovery and Resilience Plan. All in all, after a contraction in
2022, investment is projected to recover marginally in 2023 before rebounding more strongly in
2024.
Muted global trade prospects are forecast to weigh on imports and exports in 2023. After a
positive contribution in 2022, net exports are expected to contribute negatively to growth in 2023
and in 2024, with exports under pressure due to price increases. All in all, real GDP growth is
projected to reach 1.2% in 2023 and increase to 1.4% in 2024.
Slowdown in the labour market
After growing at a fast pace of 2.0% in 2022, employment decelerated in the last quarter of the
year amid subdued economic activity. It is projected to remain weak in 2023. As such, employment
growth is forecast to decline to 0.6% this year, before regaining some strength to 0.9% in 2024,
mirroring the increase in economic growth. The unemployment rate is expected to increase slightly
from 5.6% in 2022 to 5.8% in 2023 before a small decline to 5.7% in 2024.
A decline in inflation
After having reached 10.3% in 2022, headline HICP inflation is forecast to fall to 3.4% in 2023
due to the fast transmission of the decline in wholesale gas and electricity prices to retail prices
and the effect of government measures to limit prices. Headline inflation is projected to remain
broadly stable at 3.5% in 2024, as the effect of these measures expires. The pass-through of
increased costs is expected to keep core inflation elevated in the first half of 2023 before slowly
receding as cost pressures ease.
Economic growth in Belgium is expected to reach 1.2% in 2023 and 1.4% in 2024, on the back of
resilient private consumption. Following the decline in energy prices and the effect of fiscal
measures, inflation is forecast to reach 3.4% in 2023 and 3.5% in 2024. The government deficit
is projected at 5% of GDP in 2023, and at 4.7% of GDP in 2024.
-8
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.1.1: Belgium - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Belgium
71
Persistently high government budget deficits
The government budget deficit landed at 3.9% of GDP in 2022, reflecting the further unwinding of
pandemic-related spending and the continuation of the economic recovery. However, public
finances remained under pressure due to the temporary support measures adopted in response to
soaring energy prices and the war in Ukraine.
In 2023, the government deficit is forecast to increase again, to 5%. The net budgetary cost of the
energy support measures is projected in the Commission 2023 spring forecast at 0.4% of GDP in
2023, compared with 0.9% in 2022. Deficit developments in 2023 are also affected by the
assumed complete phasing out of COVID-19 emergency temporary measures, which are estimated
to have amounted to 0.5% of GDP in 2022. At the same time, the expenditure ratio is expected to
increase further, notably due to the automatic indexation of public sector wages and social
benefits and to rising interest payments in 2023. At the same time, a temporary reduction in
social contributions is set to have a deficit-increasing impact during the first half of
2023. In addition, a reform of the taxation of energy products consisting of a permanent reduction
in the VAT rate on residential gas and electricity contracts (from 21% to 6%) combined with an
increase of excise duties is projected to have a deficit increasing net impact in 2023 and 2024.
In 2024, the government budget balance is projected to slightly narrow, to 4.7% of GDP, as the
Commission currently assumes a full phasing out of energy support measures in 2024. The still
high government deficit forecast for 2024 can be mainly explained by the structural growth in
permanent current expenditure caused notably by rising ageing costs, and by higher interest
payments on public debt.
Government debt landed at 105% of GDP in 2022, and it is forecast to increase to 106% in 2023
and to 107% of GDP in 2024, driven by high budget deficits and by debt-increasing stock flow
adjustments in 2023 and in 2024.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
502.5 100.0 1.6 2.3 -5.4 6.3 3.2 1.2 1.4
245.8 48.9 1.5 1.7 -8.3 5.5 4.1 2.6 1.7
120.7 24.0 1.1 2.3 0.1 5.0 3.2 0.7 0.7
121.5 24.2 2.5 5.0 -5.3 5.1 -0.8 0.7 2.0
436.3 86.8 3.1 2.4 -5.0 11.3 5.1 1.3 2.5
431.0 85.8 3.4 2.0 -5.6 10.7 4.9 1.6 2.7
507.2 100.9 1.5 2.3 -5.3 6.2 3.0 1.4 1.4
1.6 2.6 -5.5 5.2 2.6 1.6 1.5
0.2 -0.7 -0.3 0.3 0.6 -0.1 0.0
-0.1 0.4 0.4 0.7 0.2 -0.3 -0.2
0.9 1.6 0.1 1.9 2.0 0.6 0.9
Unemployment rate (a)
7.9 5.5 5.8 6.3 5.6 5.8 5.7
2.1 2.0 -1.6 4.1 7.2 9.0 3.4
1.4 1.3 4.1 -0.2 5.9 8.3 2.9
15.1 12.3 20.5 17.0 12.9 14.0 13.4
1.7 1.7 1.5 2.8 5.9 3.8 2.3
2.0 1.2 0.4 3.2 10.3 3.4 3.5
-0.3 0.8 1.2 -2.0 -5.0 2.0 0.1
0.6 0.8 1.3 0.8 -2.2 -0.9 -1.0
2.2 0.1 1.1 0.4 -2.9 -1.8 -1.8
-2.3 -2.0 -9.0 -5.5 -3.9 -5.0 -4.7
-2.2 -3.0 -5.8 -4.7 -4.2 -4.9 -4.5
100.0 97.6 112.0 109.1 105.1 106.0 107.3
GNI (GDP deflator)
Table II.1.1:
Main features of country forecast - BELGIUM
2021
Annual percentage change
GDP
Private Consumption
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
Contribution to GDP growth:
Domestic demand
Inventories
Net exports
Structural budget balance (d)
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Employment
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Harmonised index of consumer prices
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Terms of trade goods
2. GERMANY
72
Growth slowly resumes after technical recession avoided
The economy avoided a technical recession in the
first quarter of 2023, with GDP reported to have
stagnated. Industrial production and construction
rebounded, whereas the decline in private
consumption is expected to have been contained.
Nevertheless, the volumes of investment and
private consumption are still below pre-pandemic
levels. The adjustment of supply chains for energy
and other intermediate products and full order
books should set the stage for a resumption of
equipment investment growth in 2023. This is
further supported by pressure on costs from still
high, by historical standards, producer, and energy
prices, which are expected to spur equipment
investment aimed at increasing energy efficiency. Easing supply bottlenecks should help unwind
production backlogs and support exports. With the import content of production and domestic
demand projected to increase as energy-intensive industries downsize, and energy imports set to
remain costlier than outside the EU, the rebound of the current account surplus is expected to
remain contained. Higher building and borrowing costs are projected to weigh on construction, but
high housing demand and plans to address infrastructure needs should remain supportive of the
sector. Overall, real GDP is expected to increase by just 0.2% in 2023. In 2024, growth is forecast
to rebound to 1.4% driven by a recovery in consumption and investment.
A tight labour market
At 45.7 million, employment was at an all-time high in late 2022. The unemployment rate reached
a historic low of 2.8% in March 2023. Reported labour shortages remain high. Employment is
expected to increase further, constrained mostly by labour supply rather than demand. Wage
growth averaged 4.7% in 2022, remaining below consumer price inflation. In view of the tight
labour market, real wage growth is expected to resume, as pay increases are shored up. With
purchasing power improving, private consumption is set to continue recovering. The household
saving rate is forecast to continue decreasing towards pre-pandemic levels.
Inflation to ease
HICP inflation peaked at 11.6% in October 2022, driven by the surge in energy prices and rising
input costs. It decelerated steadily to 7.6% in April 2023. In 2023, the pass-through of elevated
wholesale energy price growth is expected to be mitigated by the price caps on gas and electricity.
Nevertheless, prices to consumers are set to remain historically high. Still rising producer costs are
set to keep HICP inflation high, at a projected 6.8% in 2023. Wage growth is expected to exert
some upward pressure on core inflation, notably on services. Corporate profitability has benefited
from the so far moderate wage increases and the ability of firms to pass costs onto prices, hence
price shock they caused. Industry has proved resilient to elevated production costs and equipment
investment is set to recover as full order books boost manufacturing and exports. The labour
market is expected to continue its robust performance, leading to a catch-up of real wages
supporting consumption. As a result, GDP growth is forecast to accelerate from 0.2% in 2023 to
1.4% in 2024. Public finances are improving as support measures are less costly than anticipated
and revenues grow strongly. As a result, the debt level is expected to return to a downward trend.
-5
-4
-3
-2
-1
0
1
2
3
4
15 16 17 18 19 20 21 22 23 24
Graph II.2.1: Germany - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Germany
73
there should be room to partly accommodate further wage growth. In 2024, inflation is projected
to ease to 2.7% on the back of a decrease in energy costs.
Budget deficit and government debt return to a downward trend
The general government deficit is projected to narrow from 2.6% of GDP in 2022 to 2.3% in 2023
and to 1.2% in 2024. The net budgetary cost of the energy support measures is projected in the
Commission 2023 spring forecast at 2.0% of GDP in 2023, compared with 1.2% in 2022. The
Commission currently assumes the net cost of energy support measures at 0.3% of GDP in 2024.
This forecast includes a deficit-increasing impact of around 1.2% of GDP for the gas and electricity
price brakes in 2023 and assumes that they are phased out in 2024. Thus, only around one
quarter of the EUR 200 billion (4.9% of GDP) originally set up for the energy price brakes is
expected to be used under the current assumptions on the development of market prices for
energy. Deficit developments in 2023 are also affected by the assumed complete phasing out of
COVID-19 emergency temporary measures, which are estimated to have amounted to 0.8% of
GDP in 2022. Additional spending by the extra-budgetary defence fund and by the Climate and
Transformation Fund is expected to support public and private investment over the forecast
horizon. Government revenue benefits from higher tax collection and social security contributions,
also supported by high inflation, while government expenditure growth is set to slow down as the
various government support measures are phased out. The government debt-to-GDP ratio peaked
at 69.3% in 2021 in the context of the pandemic. It then decreased by around 3 pps. to 66.3% at
the end of 2022, also benefiting from the growth of nominal GDP. Government debt is projected to
further decrease to 65.2% of GDP in 2023 and 64.1% in 2024.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
3601.8 100.0 1.3 1.1 -3.7 2.6 1.8 0.2 1.4
1773.8 49.2 1.0 1.6 -5.7 0.4 4.3 0.0 1.8
797.5 22.1 1.7 2.6 4.0 3.8 1.2 -0.3 1.4
783.8 21.8 1.7 1.9 -2.3 1.2 0.4 -0.7 2.0
1693.9 47.0 4.5 1.3 -9.3 9.7 2.9 1.5 3.1
1502.4 41.7 4.6 2.9 -8.5 9.0 6.0 0.4 3.4
3729.5 103.5 1.6 1.1 -4.1 3.2 1.7 0.1 1.3
1.2 1.8 -2.6 1.3 2.5 -0.2 1.7
-0.1 -0.1 -0.2 0.5 0.4 -0.1 -0.3
0.2 -0.6 -0.8 0.8 -1.1 0.5 0.0
0.8 0.9 -0.8 0.1 1.3 0.6 0.2
Unemployment rate (a)
6.5 3.0 3.7 3.7 3.1 3.2 3.1
1.9 3.4 0.4 3.1 4.2 5.5 5.3
1.3 3.3 3.4 0.6 3.7 5.9 4.1
17.3 18.3 23.6 22.9 20.0 20.0 19.7
1.3 2.1 1.8 3.1 5.5 6.1 2.4
1.5 1.4 0.4 3.2 8.7 6.8 2.7
0.2 1.1 2.8 -4.2 -6.2 3.3 0.0
7.0 6.2 5.6 5.3 3.0 4.7 4.6
6.4 7.7 7.1 7.4 4.0 5.8 5.6
-0.9 1.5 -4.3 -3.7 -2.6 -2.3 -1.2
1.1 0.9 -2.7 -2.9 -2.3 -2.0 -1.0
70.5 59.6 68.7 69.3 66.3 65.2 64.1
Private Consumption
Table II.2.1:
Main features of country forecast - GERMANY
2021
Annual percentage change
GDP
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Terms of trade goods
Domestic demand
Inventories
Net exports
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
3. ESTONIA
74
Growth stagnates
sent import prices soaring. In early 2023, economic sentiment remained downbeat. Real GDP
growth is expected to be negative again this year, projected at -0.4%, on the back of high inflation,
tightening financing conditions, and subdued economic growth in major trade partner economies.
A strong labour market and a more optimistic consumer outlook are set to improve private
consumption in 2023. Nevertheless, the fall in purchasing power due to high inflation and only
gradually catching up wages implies that households are likely to continue with more conservative
spending. Real private consumption is hence projected to contribute marginally to growth in 2023,
before recovering in 2024, when inflationary pressures are expected to fade and real incomes to
rise.
Investment is also set to recover in 2023, but to grow only modestly amid tighter financing
conditions before rebounding more strongly in 2024. Nonetheless, corporate balance sheets are
overall healthy and should be able to withstand financial tightening. Sentiment has weakened
across all major businesses, particularly in construction. The projected weak economic performance
large accumulation of inventories in 2022 is expected to be gradually reversed in 2023.
set to improve on the back of rising wages and lower inflation, contributing to stronger
consumption. Exports are expected to increase in line with improving trends in the main export
destinations. Government spending and public investment are set to remain key drivers of growth
throughout the forecast horizon.
Labour market is still tight
Despite weak economic performance, the labour
market remained tight. The unemployment rate
stood at 5.1% in February, continuing its declining
trend. The arrival of people fleeing the war in
Ukraine continues, adding to the labour force.
Wages are picking up amid prevalent labour
shortages and are expected to grow strongly in
2023, with impetus provided by the public sector.
Employment growth is set to weaken due to
subdued economic activity. The unemployment
rate is thus estimated to rise to 6.2% in 2023.
Inflation to decline gradually
In the first quarter of 2023, HICP inflation remained high, at 17.3%, but it is expected to drop
gradually. The energy component is no longer the main driver, given the decline in oil and gas
Real GDP is forecast to decrease by 0.4% in 2023. Private consumption is set to be weak while
investment is expected to gradually return to growth amid tightening financial conditions. Exports
are projected to remain subdued due to weak growth in trade partner economies. In 2024,
economic growth is forecast to strengthen as easing inflation and growing wages translate into
higher real disposable incomes. Consumer price inflation is set to remain high in 2023, at 9.2%,
before falling to 2.8% in 2024. The government deficit is projected to expand to 3.1% of GDP in
2023 before falling again in 2024 to 2.7%, while public debt is expected to increase mildly, to
21.3% of GDP in 2024.
-6
-4
-2
0
2
4
6
8
10
15 16 17 18 19 20 21 22 23 24
Graph II.3.1: Estonia - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Estonia
75
prices and the implementation of policy measures to cap retail electricity prices and limit the
increase in gas and heating prices. In contrast, inflation of unprocessed food prices remained
stubbornly high, at 26.5% in the first quarter, with no signs of deceleration, while processed food
prices were 20% higher than a year ago. Prices of both non-energy industrial goods and services
recorded rises of above 12% in March, the latter potentially fuelled by intensifying wage pressures.
Going forward, HICP inflation is projected to decline as energy inflation base effects taper off and
food prices moderate. HICP inflation is forecast at 9.2% in 2023 before falling to 2.8% in 2024.
An expansionary budget adds to the 2023 deficit
The general government deficit improved from 2.4% in 2021 to 0.9% in 2022. This was driven by
an extraordinarily strong growth in revenue, by over 13%, as the inflationary environment boosted
VAT revenue and employment growth supported labour taxes. The deficit is forecast to increase
markedly to 3.1% of GDP in 2023, as expenditure is set to rise significantly due to substantial
increases in public wages (especially for teachers, cultural workers and internal security staff) and
pensions, as well as to new permanent spending programmes for defence, education and child
benefits. The inflationary boost to 2022 revenue is set to be short-lived. In 2023, tax revenue is
projected to slow down in line with nominal GDP, and an increase in the tax-free allowance will
reduce personal income tax revenue. At the same time, the net budgetary cost of the energy
support measures is projected at 0.3% of GDP in 2023, compared with 0.7% in 2022. The deficit is
projected to decrease only slightly, to 2.7% of GDP in 2024, despite stronger economic growth and
the assumed full phasing out of energy measures. The expenditure commitments made over the
previous years were largely permanent, some of which are linked to nominal GDP growth (like
defence, innovation) and others indexed to inflation and wage growth (like certain social transfers).
Public debt is expected to increase from 18.4% of GDP in 2022 to 21.3% in 2024, still the lowest
ratio in the EU. The current forecast does not yet include the significant taxation changes planned
by the new government, which took office in mid-April 2023, because the changes are not yet fully
specified in legal acts. The main planned taxation changes relate to the personal income tax
system (reducing taxation on the aggregate), a 2 pps. rise to VAT, adjustments and a rise to
corporate income tax, instituting a car tax, and potential rises to environmental taxes and excises
on alcohol and tobacco. The aim is to improve the balance of public finances, starting from 2024.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
31.4 100.0 3.2 3.7 -0.6 8.0 -1.3 -0.4 3.1
15.1 48.1 3.6 4.6 -1.0 6.4 2.3 0.3 4.2
6.2 19.8 2.4 3.1 2.8 4.0 -0.3 4.3 0.7
9.1 28.9 4.4 -3.7 24.7 2.8 -10.9 1.8 4.2
24.6 78.3 6.9 6.1 -5.3 19.9 5.0 0.9 2.8
24.7 78.7 6.7 3.8 0.4 21.0 5.8 1.8 3.2
30.9 98.3 3.3 4.0 0.2 7.3 -0.5 -0.2 3.2
3.9 1.9 6.3 4.9 -2.1 1.4 3.3
0.0 -0.2 -0.4 1.6 3.2 -1.0 0.1
-0.2 1.8 -4.2 -0.7 -0.7 -0.8 -0.3
0.6 1.3 -2.7 0.1 4.6 0.2 0.4
Unemployment rate (a)
8.6 4.5 6.9 6.2 5.6 6.2 6.1
8.0 7.2 6.2 9.8 8.3 10.3 4.8
5.3 4.7 3.9 1.8 14.8 11.0 2.0
6.1 11.8 14.3 10.5 5.3 8.1 7.8
4.5 3.2 -0.5 6.0 16.6 10.3 3.6
3.4 2.3 -0.6 4.5 19.4 9.2 2.8
0.7 -0.7 1.1 0.6 0.5 1.6 0.8
-8.7 -3.3 -0.9 -4.1 -7.4 -6.8 -6.6
-3.8 2.4 -1.0 -1.8 -1.3 -0.3 0.1
0.4 0.1 -5.5 -2.4 -0.9 -3.1 -2.7
-0.2 -0.5 -4.1 -4.3 -0.2 -1.2 -1.3
7.3 8.5 18.5 17.6 18.4 19.5 21.3
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Note : Contributions to GDP growth may not add up due to statistical discrepancies.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.3.1:
Main features of country forecast - ESTONIA
2021
Annual percentage change
GDP
4. IRELAND
76
Economic activity continues to show dynamism
consumption and the continued solid performance of net exports, related to the activity of
multinational companies. Sentiment readings in the first quarter of 2023 reflected an upbeat pace
of activity. Real GDP is expected to grow by 5.5% in 2023 and 5.0% in 2024. Modified domestic
demand, which better reflects underlying domestic economic activity in Ireland, is estimated to
have increased by 8.2% in 2022, and is expected to expand by 2.0% in 2023 and 2.3% in 2024.
Private consumption, a stable driver of domestic
growth, is expected to remain solid thanks to
increasing household income and employment.
While retail sales and services grew only mildly in
early 2023, consumer sentiment in Ireland
appears resilient to cost-of-living pressures. The
high savings rate is expected to decrease
gradually but remain far above the historical
average.
In 2022, investment grew by 25.9%, partly driven
by a few large machinery investments by
multinationals. However, these investments are
estimated to have begun to ease in the second
half of 2022. In 2023, high borrowing costs are set to impact ho
particularly in construction. Capacity constraints in the construction sector are likely to slow
housing completions. In 2024, investment is projected to regain some momentum as capacity
constraints ease and the implementation of the National Development Plan continues.
energy prices and easing supply chain problems are projected to favour export growth. However,
the recent record performances of the export-intensive pharmaceutical and information and
communication sectors, which followed the uplift during the pandemic, are unlikely to be sustained.
While remaining strong, net exports are projected to moderate slightly in 2024.
The labour market is operating at full employment
Despite a recent rise in the participation rate now 2 pps above the pre-pandemic level the
vacancy rate is above historical averages, indicating marked difficulties to fill vacant positions. At
the beginning of 2023, the number of people in work was close to record levels and the
unemployment rate was at near-historic lows of 4.3%. This labour market tightness is expected to
persist throughout the forecast horizon. As the Irish economy is estimated to be operating at full
employment, real wages are projected to increase significantly.
Following double-digit growth in 2022, GDP is projected to remain on a solid growth path of 5.5%
in 2023 and 5.0% in 2024. Net exports are the main driver of economic activity, which is also
supported by resilient private consumption. Inflation is estimated to have peaked at 8.1% in 2022
and is set to moderate gradually throughout 2023 to reach 2.6% in 2024. The budget surplus is
projected to increase further in 2023 and 2024.
-35
-25
-15
-5
5
15
25
35
15 16 17 18 19 20 21 22 23 24
Graph II.4.1: Ireland - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Ireland
77
Inflation projected to ease
HICP inflation reached 8.1% in 2022, driven by an increase of more than 40% in the energy
component, around 7% in food and more than 4% in the remaining categories. Inflation is
projected to decrease to 4.6% in 2023 and 2.6% in 2024 as energy prices decrease. However, core
inflation is expected to settle more slowly as food prices increase throughout the forecast horizon
and wage pressures feed into services prices. Core inflation is projected to reach 5.3% in 2023 and
4.6% in 2024.
Risks to the outlook include a potential shock affecting global and high-value added sectors and
the impact of housing undersupply on labour supply growth and competitiveness.
Budget balance to remain in surplus
2023 and 2024, government budget surpluses are forecast to widen to 1.7% and 2.2% of GDP,
respectively. Revenue growth in 2023 and 2024 is projected to be supported by a robust labour
market and strong dynamics in the economy. Expenditure is driven mainly by trend growth in core
spending. The net budgetary cost of the energy support measures is projected in the Commission
2023 spring forecast at 0.3% of GDP in 2023, compared with 0.5% in 2022. The Commission
currently assumes a full phasing out of energy support measures in 2024. The 2023 draft Stability
Programme also allocates EUR 2 billion to a contingency for hosting persons fleeing Ukraine. In the
longer term, international tax policy changes are set to take effect, and might reduce revenues
from corporate taxes.
The general government debt-to-GDP ratio is forecast to decrease from 44.7% in 2022 to 40.4%
in 2023, and 38.3% in 2024.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
426.3 100.0 4.3 5.4 6.2 13.6 12.0 5.5 5.0
100.8 23.6 2.2 2.5 -11.9 4.7 6.6 4.1 3.9
52.2 12.3 1.7 6.5 10.5 6.1 1.6 0.3 -0.5
99.2 23.3 5.9 100.9 -16.5 -39.0 25.9 1.8 2.8
573.0 134.4 6.8 11.8 11.2 14.1 15.0 6.7 5.5
405.1 95.0 5.8 42.3 -2.1 -8.3 19.0 5.5 4.5
323.5 75.9 3.8 5.6 2.9 14.5 6.9 6.4 4.8
2.7 30.2 -11.2 -14.6 7.8 1.4 1.6
0.1 0.6 0.7 0.3 1.0 0.0 0.0
2.2 -25.4 16.9 28.3 2.1 3.7 3.1
1.2 3.0 -2.8 6.0 6.6 2.4 0.9
Unemployment rate (a)
9.1 5.0 5.9 6.2 4.5 4.3 4.3
2.6 3.8 3.7 2.6 4.2 5.6 5.8
-0.5 1.3 -5.1 -4.2 -0.8 2.4 1.8
9.9 10.7 25.5 24.3 21.5 19.9 18.0
1.2 3.6 -1.6 0.7 5.3 4.6 2.5
1.1 0.9 -0.5 2.4 8.1 4.6 2.6
-0.7 3.1 -2.4 -9.1 -3.4 1.2 0.4
24.7 33.1 38.1 39.2 40.7 41.6 41.0
-1.4 -19.8 -6.8 14.2 8.8 11.1 11.9
-5.1 0.5 -5.0 -1.6 1.6 1.7 2.2
-2.1 2.6 -1.8 -1.7 -0.8 -0.1 1.0
66.1 57.0 58.4 55.4 44.7 40.4 38.3
Private Consumption
Table II.4.1:
Main features of country forecast - IRELAND
2021
Annual percentage change
GDP
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Terms of trade goods
Domestic demand
Inventories
Net exports
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
5. GREECE
78
Economic activity to slow down in 2023 and further moderate in 2024
Despite the energy crisis and associated inflationary pressures throughout the year, the Greek
economy grew by 5.9% in 2022. Buoyant private consumption, significant investment activity, and
the impetus provided by the rebound of tourism during the summer season contributed to the
strong growth performance. Moreover, real GDP rose sizeably in the final quarter of 2022 despite
widespread price pressures implying a significant carry-over effect for 2023.
Real GDP is forecast to expand by 2.4% this year on the back of both domestic and external
demand. However, growth in private consumption is set to cool down significantly compared to the
post-pandemic recovery last year, amid a loss in household real disposable income and a still
negative savings rate. The ongoing implementation of the RRP is shifting from reforms towards
investments and is thus set to sustain capital spending, notably in construction and to a lesser
extent in equipment, partly offsetting the impact from tighter funding conditions. The full recovery
of international tourism to pre-pandemic levels is set to bolster Greek exports. In line with
moderating domestic demand, import growth is projected to ease. However, the trade deficit is
expected to remain high despite falling energy prices and positive terms-of-trade effect.
In 2024, economic growth is projected at 1.9%, gradually converging to the longer-term growth
potential. Investment is set to remain a key contributor to output growth, albeit at lower rates than
in 2021-2023, while household spending is likely to be supported by a rise in real incomes.
Resilient labour market amid increasing wage
pressures
The labour market improved markedly in 2022
amid sustained job creation. Even as people
continued to return to the labour market following
the pandemic, implying a rising labour force, the
unemployment rate fell to 12.5% and is set to
decline to 11.8% by 2024. Despite the expected
pick-up in nominal wage growth this year and
next, real wage growth is not expected to turn
positive before 2024.
Inflation to decelerate on the back of lower energy prices
Headline inflation averaged 9.3% in 2022 but declined to 6.3% by Q1-2023. Price pressures are
expected to further moderate this year thanks to easing energy prices. Consumer prices are
forecast to increase by 4.2% and 2.4% in 2023 and 2024 respectively. However, the lagged pass-
through of high energy and food prices to services and non-energy industrial goods, which has
become more visible since the last quarter of 2022, will push up core inflation in 2023. Despite a
9.4% increase in the minimum wage in April 2023, risks of a wage-price spiral appear contained.
However, upside risks to the inflation outlook result from a more rapid wage adjustment that could
feed into higher core inflation.
Economic activity is expected to grow by 2.4% in 2023. The output expansion is supported by a
resilient labour market and the implementation of the Recovery and Resilience Plan (RRP).
Headline inflation averaged 9.3% in 2022 but is set to moderate to 2.4% by 2024 due to easing
energy prices. While remaining negative, the general government balance deficit keeps shrinking
on the back of improved revenue collection. Public debt is set to decline further.
-12
-8
-4
0
4
8
12
15 16 17 18 19 20 21 22 23 24
Graph II.5.1: Greece - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Greece
79
Return to primary surplus came earlier than expected
The general government deficit in 2022 turned out significantly lower than expected, reaching
2.3% of GDP compared to 4.1% of GDP forecast in autumn. The primary balance recorded a
surplus of 0.1% of GDP. This improvement is primarily due to better-than-expected tax revenues,
particularly from value-added tax and direct taxes.
Following the better-than-expected outcome in 2022, the general government deficit is forecast to
shrink further to 1.3% in 2023. This can be mainly attributed to the phasing out of the remaining
pandemic-related measures (which are estimated to have amounted to 1.5% of GDP in 2022) and
to a significant reduction in the cost of the measures to mitigate the economic and social impact
of high energy prices (from 2.5% of GDP in 2022 to 0.2% in 2023). At the same time, the growth
of public wages and social benefits is expected to remain muted. The forecast also factors in two
temporary measures introduced in response to inflationary pressures with an estimated fiscal cost
of 0.3% of GDP: (a) a voucher of EUR 35 per month for the period February to July 2023 for
households fulfilling certain income criteria and (b) a one-time pension bonus for pensioners
whose pension is currently not indexed.
The general government deficit is expected to decrease further to 0.6% of GDP in 2024, implying a
primary surplus of 2.5%. The improvement of the fiscal balance is driven by the phasing out of the
remaining energy-related measures by 2024. Despite the planned reform of the wage bill with an
estimated fiscal impact of 0.2% of GDP for 2024, public spending is expected to remain overall
muted thereby improving the balance.
The public debt-to-GDP ratio declined sharply in 2022 largely driven by the increase in nominal
GDP. The ratio is expected to decline further to 160.2% of GDP in 2023 and 154.4% in 2024,
helped by primary surpluses and economic growth.
The fiscal outlook remains subject to upside and downside risks. In particular, downside risks stem
from pending legal cases, most notably the litigation cases against the Public Properties Company
(ETAD). On the upside, if the improvement in tax compliance continues, revenues could turn out
higher than currently expected.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
181.7 100.0 -0.5 1.9 -9.0 8.4 5.9 2.4 1.9
123.4 67.9 -0.3 1.9 -7.7 5.8 7.8 1.6 1.4
39.3 21.6 -0.2 2.1 2.6 2.2 -1.6 -0.2 -1.4
24.1 13.3 -4.0 -2.2 1.1 20.0 11.7 7.2 6.0
74.3 40.9 3.6 4.9 -21.5 24.1 4.9 6.5 5.2
88.3 48.6 1.6 2.9 -7.3 17.7 10.2 4.7 3.8
180.9 99.6 -0.7 2.1 -8.6 8.5 3.9 3.2 2.1
-0.7 1.5 -4.7 6.9 6.5 2.1 1.6
-0.1 -0.3 1.3 0.8 2.4 -0.1 -0.1
0.4 0.7 -5.6 0.7 -3.0 0.5 0.4
0.3 2.2 -1.8 2.7 3.8 0.8 0.7
Unemployment rate (a)
16.7 17.9 17.6 14.7 12.5 12.2 11.8
0.2 -0.3 -0.6 2.3 0.3 3.6 2.8
1.0 0.0 7.2 -3.1 -1.7 1.9 1.5
1.3 -2.5 2.4 3.6 -3.0 -1.2 0.0
1.1 0.2 -0.9 1.3 8.1 4.7 2.9
1.8 0.5 -1.3 0.6 9.3 4.2 2.4
-0.4 -1.4 -4.1 0.4 8.0 2.8 1.9
-13.6 -12.9 -11.9 -14.8 -18.8 -18.5 -18.1
-7.6 -2.3 -8.0 -8.2 -11.8 -9.2 -7.8
-7.1 0.9 -9.7 -7.1 -2.3 -1.3 -0.6
5.5 3.1 -3.1 -4.7 -2.2 -1.5 -1.0
145.1 180.6 206.3 194.6 171.3 160.2 154.4
Private Consumption
Table II.5.1:
Main features of country forecast - GREECE
2021
Annual percentage change
GDP
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Terms of trade goods
Domestic demand
Inventories
Net exports
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
6. SPAIN
80
Economic activity is expected to gradually pick up
The Spanish economy posted growth of 5.5% in 2022. The strong outturn stemmed from a very
positive first half of the year, favoured by revived private consumption and the impulse provided
by the rebound of tourism. In the second half of the year, real GDP growth slowed down
significantly due to widespread price pressures affecting consumption and investment.
In the first quarter of 2023, real GDP recorded a
quarterly growth of 0.5%, largely driven by the
contribution from external demand thanks to the
solid performance of the tourism sector. Economic
activity is forecast to expand by 1.9% this year
overall, also benefiting from a stronger carry-over
effect from 2022 than previously anticipated.
Over the year, consumption is set to recover from
the contraction in 2022-Q4 and 2023-Q1,
underpinned by the continued resilience of the
labour market and real income gains for
pensioners and workers on minimum wage. The
continuous mobilisation of RRP funds is set to
contribute to sustaining investment, notably in
non-residential construction, while lower expected import prices and eased supply-chain
bottlenecks should favour the pick-up in equipment, following the sharp downturn in the second
half of 2022. The full recovery of international tourism to pre-pandemic levels and the positive
effect on competitiveness arising from expected lower energy prices are set to further improve the
performance of the external sector. The gap with the pre-pandemic output level (2019-Q4),
standing at 0.9% in 2022-Q4, is now set to be closed between the second and the third quarter of
2023. Real GDP growth is projected to accelerate in 2024 to 2.0% on the back of invigorated
domestic demand, including a stronger contribution of investment.
Downside risks to the outlook relate to the adverse impact of the tightening of financial conditions
private debt. Moreover, for households, while the bulk of new mortgage loans are granted with
fixed interest rates, the outstanding stock remains concentrated on variable-rate loans.
Strong labour market amid increasing wage pressures
The labour market performed well in 2022 on the back of sustained job creation and the reduction
in the share of temporary employees in the private sector. The unemployment rate reached 12.9%
in 2022. It is projected to remain elevated, albeit on a slightly declining trend, down to 12.7% in
2023 and to 12.4% in 2024. Following the significant decline in real terms during 2022, nominal
wage growth is expected to accelerate in 2023, although still remaining marginally below the
average annual inflation for this year.
Inflation to decelerate on the back of lower energy prices
Headline inflation reached 8.3% on average in 2022 but declined to 5.7% y-o-y in 2022-Q4 and is
expected to further decelerate in 2023 mainly due to the moderation of energy prices. Moreover,
Following strong expansion in 2022, economic activity is expected to slow down in 2023. Labour
market resilience and the implementation of the Recovery and Resilience Plan (RRP) are set to
sustain growth, which is forecast to accelerate further in 2024. Headline inflation is projected to
moderate on the back of to lower energy prices. The still high general government deficit is set to
keep decreasing but more gradually than in the past two years due to slower revenue growth.
-12
-10
-8
-6
-4
-2
0
2
4
6
15 16 17 18 19 20 21 22 23 24
Graph II.6.1: Spain - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
%, pps.
Euro Area Member States, Spain
81
the extension until end-2023 of most of the government support measures adopted last year and
the introduction of additional ones, including the VAT reduction on several food products are also
projected to contribute to the progressive decline of headline inflation. Overall, it is forecast to
reach 4.0% in 2023 and further decrease to 2.7% in 2024. Nonetheless, the pass-through from
energy and food prices to other goods and services, which became increasingly visible from the
last quarter of 2022, is set to prompt core inflation to remain elevated over the forecast horizon.
Upside risks resulting from a more rapid wage adjustment, stemming also from the extension of
inflation clauses and the 8% increase in the minimum wage, could feed into still higher core
inflation.
The government deficit is set to continue to reduce although revenue dynamism fades
The public deficit continued to improve in 2022, declining to 4.8% of GDP, essentially driven by
strong revenues. Corporate income tax revenue grew by 11.1%, reflecting the recovery of profits
after the pandemic, while dynamic job creation supported the solid performance of personal
income tax revenues, which grew by 16.2% in 2022. VAT revenue also recorded double-digit
growth (13.1%) driven by strong private consumption, the recovery of international tourism, the
dynamism of the housing sector and the sharp increase in nominal imports.
The net budgetary cost of the energy support measures is projected in the Commission 2023
spring forecast at 0.6% of GDP in 2023, compared with 1.6% in 2022. The reduction of taxes on
electricity and gas and the social voucher have been extended, while the fuel rebate has become
more targeted. Available data for the first months of 2023 points to continued dynamism of
revenues but with some deceleration, which is expected to continue over the course of the year. On
the expenditure side, moderate growth is projected, in line with nominal GDP. Deficit developments
in 2023 are also affected by the assumed complete phasing out of COVID-19 emergency
temporary measures, which are estimated to have amounted to 0.5% of GDP in 2022. The general
government deficit is set to narrow, but more gradually than previously, to 4.1% of GDP in 2023.
The Commission currently assumes a full phasing out of almost all energy support measures in
2024., contributing to the decline of the deficit to 3.3%. The debt-to-GDP ratio declined strongly in
2022, by 5.1pps. to reach 113.2%, driven by high nominal GDP growth. Public debt is projected to
keep decreasing, but more gradually, to 110.6% in 2023 and 109.1% in 2024 also due to nominal
GDP growth.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
1206.8 100.0 1.4 2.0 -11.3 5.5 5.5 1.9 2.0
678.8 56.2 1.1 1.1 -12.2 6.0 4.4 0.9 2.3
258.6 21.4 2.4 1.9 3.5 2.9 -0.7 1.7 0.6
238.6 19.8 0.2 4.5 -9.7 0.9 4.6 2.2 4.2
421.6 34.9 3.3 2.2 -19.9 14.4 14.4 4.1 3.3
403.7 33.4 2.2 1.3 -14.9 13.9 7.9 2.8 4.2
1213.2 100.5 1.5 2.0 -11.3 5.8 5.2 2.0 1.9
1.1 1.9 -8.3 4.2 3.3 1.3 2.3
0.0 -0.2 -0.8 1.0 -0.2 0.0 0.0
0.3 0.4 -2.2 0.3 2.4 0.6 -0.3
0.4 2.6 -7.6 6.6 3.8 1.1 1.3
Unemployment rate (a)
16.8 14.1 15.5 14.8 12.9 12.7 12.4
2.2 3.2 2.8 -0.7 2.0 4.7 3.5
1.2 3.8 7.2 0.3 0.4 3.9 2.8
7.9 8.2 17.7 13.8 7.2 7.0 6.6
1.6 1.4 1.2 2.3 4.3 4.4 2.9
2.0 0.8 -0.3 3.0 8.3 4.0 2.7
-0.2 0.1 2.8 0.1 -5.1 1.0 0.5
-4.4 -2.1 -0.8 -1.6 -4.4 -4.1 -4.1
-2.5 2.1 0.6 1.0 0.6 1.6 1.5
-4.4 -3.1 -10.1 -6.9 -4.8 -4.1 -3.3
-2.0 -3.8 -3.7 -3.6 -4.0 -3.7 -3.2
71.1 98.2 120.4 118.3 113.2 110.6 109.1
Private Consumption
Table II.6.1:
Main features of country forecast - SPAIN
2021
Annual percentage change
GDP
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Terms of trade goods
Domestic demand
Inventories
Net exports
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
7. FRANCE
82
Mild growth in sight
GDP growth in 2022 (+2.6%) was mostly on the back of a substantial carry-over effect from 2021.
The economy slowed down in the second half of 2022, amid increasing supply bottlenecks and
high energy prices, and is expected to remain subdued over the first half of 2023, with growth in
the first quarter estimated at +0.2%.
In 2023, investment is set to slow down on the
back of tighter financial conditions. Private
consumption is expected to remain sluggish as
consumer confidence stays low. The wave of
social unrest following the pension reform is
expected to weigh on economic activity in the first
half of the year. However, the moderation of
inflation and the easing of social tensions are set
to allow for a gradual recovery in the second half
of the year, with private consumption set to slowly
pick-up. Net exports are forecast to have a slightly
positive contribution to growth. Overall, real GDP
is forecast to grow by 0.7% in 2023.
In 2024, the economy is projected to keep gaining momentum on the back of lower energy prices,
with 1.4% GDP growth. This recovery is expected to be driven by domestic demand, with a
preserved household purchasing power resulting from the effect of government measures,
dynamic wages, and a very favourable labour market. Net exports are set to have a zero
contribution to growth with strong exports growth offset by rising imports as household
consumption increases. Investment from both households and corporations is projected to recover
progressively as the monetary tightening cycle is expected to have passed its peak.
Labour market set to stabilise
The labour market remained dynamic in 2022. The unemployment rate reached 7.2% in 2022-Q4,
its lowest level since 2008-Q1, while the employment rate reached a record high. Employment
growth is set to slow down in 2023 and 2024 (+0.3% and +0.4% respectively, after +2.4% in
2022), as labour hoarding progressively dissipates, the effect of apprenticeship contracts
decreases, hours worked return to their 2019 levels and labour productivity bounces back. The
unemployment rate is expected to increase to 7.4% in 2023, and to stabilise at 7.5% in 2024.
Inflation expected to remain high
Inflation increased to 5.9% in 2022, driven by energy and commodity prices, but remained the
lowest in the EU thanks to government measures. In 2023-Q1, the increase in regulated electricity
and gas prices, the end of the fuel rebate and the delayed increase of core inflation pushed
headline inflation up. Headline inflation is forecast to decrease only gradually throughout the
forecast horizon, as wage increases feed into core inflation while lower energy prices translate into
non-energy industrial goods with a delay and food products inflation remains high. Thus, inflation
is expected to stand at 5.5% in 2023 as a whole, before slowing down to 2.5% in 2024.
Economic activity is set to remain subdued in 2023 (0.7% annual growth) after a significant
slowdown in the second half of 2022, but is forecast to gain momentum in 2024 (1.4%). Inflation
is projected to decrease only progressively over the forecast horizon (to 5.5% in 2023 and 2.5%
in 2024, after 5.9% in 2022), despite the decrease of energy and commodity prices. The public
deficit is forecast to remain at 4.7% of GDP in 2023 and to decline to 4.3% in 2024. Public debt
is set to decline to 109.5% of GDP by 2024.
-10
-8
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.7.1: France - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, France
83
Debt to decline despite still high deficits
The general government deficit declined to 4.7% of GDP in 2022. This is 0.3 pps. better than
revenues on the back of high inflation. The reduction was also driven by the phasing-out of most
pandemic-related measures and by lower expenditure under France Relance, compared to 2021.
These effects outweighed the sharp increase in interest payments, mainly related to inflation-
indexed bonds, and the cost of measures put in place to mitigate the impact of high energy prices.
These included a cap on electricity and gas regulated prices, the discount on transport fuels and
The cost of these measures (net of revenues from renewable energy production and extra-profits
of energy producers) is estimated at around EUR 25 bn (1 % of GDP) in 2022.
Despite the expected economic slowdown, which is set to weigh on tax revenues, the deficit is
forecast to remain at 4.7% of GDP in 2023, following the withdrawal of some energy-related
measures adopted in 2022, including the discount on transport fuels. Yet, the net budgetary cost
of the energy support measures is projected at 1.0% of GDP in 2023, compared with 0.9% in
2022. Deficit developments in 2023 are also affected by the assumed almost complete phasing
out of COVID-19 emergency temporary measures, which are estimated to have amounted to 0.5%
of GDP in 2022. Moreover, the debt interest burden is set to rise slightly further due to higher
interest rates for the new issues. Both the revenue and expenditure-to-GDP ratios are expected to
fall by 1 pp., to 52.4% and to 57.1%, respectively. These projections also incorporate the budgetary
impact of the investment plan France 2030 (0.1% of GDP) and the estimated cost of hosting
persons fleeing Ukraine.
For 2024, the general government deficit is set to decline to 4.3% of GDP. While the revenue ratio
is expected to decrease just marginally, the expenditure ratio is projected to decline by ½ pp.,
mainly due to the unwinding of energy-related measures. The Commission currently assumes the
net cost of energy support measures at 0.2% of GDP. In turn, interest payments on government
debt are projected to broadly stabilise at around 2% of GDP.
After declining from 111.6% of GDP in 2022, public debt is set to broadly stabilise at around
109.5% over the forecast horizon. The decline from 2022 is expected to be mainly driven by the
projected dynamic nominal growth, helped by the high GDP deflator growth in 2023.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
2500.9 100.0 1.2 1.8 -7.8 6.8 2.6 0.7 1.4
1317.1 52.7 1.3 1.8 -6.7 5.3 2.9 0.1 1.5
606.4 24.2 1.5 1.0 -4.0 6.4 2.6 1.1 0.9
606.2 24.2 1.5 4.0 -8.2 11.5 2.2 1.2 1.7
736.5 29.4 2.7 1.6 -16.8 8.8 7.0 4.4 3.8
785.0 31.4 3.4 2.3 -12.8 8.0 8.9 3.6 3.5
2574.7 103.0 1.3 1.7 -8.3 8.3 2.5 0.7 1.4
1.4 2.1 -6.5 7.0 2.7 0.6 1.4
0.1 0.0 -0.2 -0.3 0.6 0.0 0.0
-0.2 -0.3 -1.2 0.1 -0.7 0.1 0.0
0.4 1.3 -0.6 2.4 2.4 0.3 0.4
Unemployment rate (a)
9.2 8.4 8.0 7.9 7.3 7.4 7.5
2.2 -0.2 -2.9 4.7 5.0 5.4 3.1
1.4 -0.7 4.7 0.4 4.9 4.9 2.1
14.4 14.7 20.5 18.3 16.1 16.0 15.1
1.3 1.3 2.8 1.3 3.0 5.4 2.6
1.5 1.3 0.5 2.1 5.9 5.5 2.5
0.1 1.3 1.3 -2.0 -3.7 5.4 0.7
-1.5 -1.4 -2.1 -3.0 -5.1 -3.3 -3.0
-0.4 -0.7 -2.5 -0.8 -3.1 -1.5 -1.3
-4.0 -3.1 -9.0 -6.5 -4.7 -4.7 -4.3
-2.8 -3.5 -4.8 -5.6 -4.7 -4.4 -4.2
82.5 97.4 114.6 112.9 111.6 109.6 109.5
Private Consumption
Table II.7.1:
Main features of country forecast - FRANCE
2021
Annual percentage change
GDP
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Terms of trade goods
Domestic demand
Inventories
Net exports
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
8. CROATIA
84
Household consumption to sustain growth as inflation decelerates further
despite headwinds related to record high inflation, supply side bottlenecks and tighter financing
conditions for firms and households. The energy price shock and its pass-through to other goods
and services affected the purchasing power of households as the year advanced, with inflation
outpacing wage growth. Still, private consumption remained the main growth contributor supported
by a steep declin
impact on growth, as booming exports of goods and services were offset by strong import growth.
In 2023, real GDP growth is set to reach 1.6% as
the country takes advantage of its accession to
the euro and Schengen areas. Headline inflation is
projected to subside, mainly on account of energy
and commodity prices, while continued
employment and wage growth are projected to
sustain private consumption. Government
consumption is projected to continue contributing
positively to growth, while investment should be
supported by increased confidence and absorption
of EU funds. The terms of trade shock suffered in
2022 is set to reverse during the year, leading to
a trade balance improvement. Overall, growth
should be broad-based across domestic demand
components, while the contribution of net exports to growth should be mildly negative.
In 2024, real GDP is expected to increase by 2.3% driven by consumption and investment. As
inflation drops towards the 2% target level and labour market shortages persist, stronger real
wage gains should boost private consumption, while absorption of funds under the Recovery and
Resilience Facility should positively contribute to growth. Rising imports and increased demand
sector to GDP growth.
Risks to the outlook are tilted to the upside. Stronger export market share gains and a better
tourist season could turn the external balance more positive than expected, while investment could
overperform on account of accelerating renovation efforts and improving investor sentiment. On
the negative side, higher inflation could materialise as labour shortages push wages up and rising
house prices (17.3% annual growth rate in the last quarter of 2022) spill over into rents.
A tight labour market supports real wage growth
The labour market performed well in 2022, with employment expanding by 2.3% and surpassing
pre-pandemic levels. Construction and trade, transport, accommodation and food services made
the biggest gains, supported by the increase in the inflow of foreign workers. The unemployment
rate edged down to 7%, the lowest in the last 13 years. Strong wage growth in the face of
decelerating inflation is set to lead to mild real income gains already in 2023, with the
decelerating inflation are projected to support private consumption, with investment getting a
boost from European funds and increased confidence. The labour market is expected to tighten
further, with the unemployment rate reaching record low levels at the end of the forecast horizon.
Headline inflation should moderate despite persistent services inflation, which is expected to keep
core inflation above headline. The general government balance is expected to deteriorate as the
indexation of public sector wages and social benefits boosts spending.
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
14
16
15 16 17 18 19 20 21 22 23 24
Graph II.8.1: Croatia - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Croatia
85
unemployment rate dropping to 6.6%. The labour force should continue growing despite a slight
drop in total population. In 2024, the pick-up in activity is set to reinforce employment growth.
Upskilling and reskilling measures are expected to help workers transitioning to expanding sectors.
Services inflation more persistent than anticipated
HICP inflation is projected to drop to 6.9% in 2023 and 2.2% in 2024 as decreasing energy prices
partly offset the persistent price growth in services and non-energy industrial goods. Consequently,
core inflation is set to outpace headline inflation at 8% in 2023 and 3% in 2024. The forecast
incorporates the effect of the energy measures, set to be phased out as of September 2023.
Asynchronous impact of inflation boosts revenues in 2022 and spending in 2023
In 2022, fiscal revenues grew markedly on account of both real growth and strong inflation. This
supported the return of the general government balance to a surplus of 0.4% of GDP in 2022.
In 2023, the surplus is expected to turn into a deficit of around 0.5% of GDP, as increased price
levels impact expenditure through indexation of public wages and social expenditure. Indirect tax
revenue is set to grow despite the temporary tax cuts, backed by still solid nominal GDP growth,
while direct taxes and contributions are set to benefit from employment and wage developments.
The phasing out of the COVID-19 support measures is offset by energy measures. Meanwhile, debt
servicing costs should remain contained as the interest rates although rising remain below
those of maturing debt, and the share of EU-issued debt, at below-market rates, increases.
The budgetary cost of the energy support measures is projected in the Commission 2023 spring
forecast at 1.5% of GDP in 2023, compared with 1.6% in 2022. The Commission assumes the cost
of energy support measures at 0.2% of GDP in 2024. The government approved a capital increase
in the state-owned energy company (HEP) of EUR 0.9 billion to finance energy price caps.
The deficit is projected to widen to 1.3% of GDP in 2024 as preserving the adequacy of public
wages and social transfers pushes up spending even as energy measures are phased out.
The debt ratio is expected to drop significantly from 68.4% in 2022 to 63% in 2023, due to GDP
growth and debt-reducing transactions (stock-flow adjustment). The decrease will subside in 2024
to 61.8%, as GDP growth slows, deficits reappear and the stock-flow adjustment is reversed.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
58.2 100.0 1.6 3.4 -8.5 13.1 6.2 1.6 2.3
33.4 57.4 1.0 4.1 -5.1 9.9 5.1 1.2 1.8
12.9 22.2 1.8 3.1 4.3 3.0 3.2 3.1 2.5
12.1 20.7 1.6 9.0 -5.0 4.7 5.8 2.9 3.7
29.8 51.2 3.7 6.8 -23.3 36.4 25.4 3.0 3.7
30.7 52.7 3.2 6.6 -12.4 17.6 25.0 2.9 3.4
58.5 100.4 1.7 3.9 -6.4 11.2 6.2 1.5 2.3
1.4 4.8 -3.1 7.6 4.8 1.9 2.3
0.2 -1.4 0.0 -1.1 1.6 -0.3 -0.1
0.0 0.0 -5.4 6.6 -0.2 -0.1 0.0
0.4 3.1 -1.2 1.2 2.3 1.0 1.2
Unemployment rate (a)
12.8 6.6 7.5 7.6 7.0 6.6 6.1
2.2 0.4 1.2 10.4 7.9 7.5 3.3
1.0 0.1 9.4 -1.2 4.0 6.9 2.2
6.2 8.5 11.9 10.7 1.7 0.4 0.0
2.2 2.0 0.7 2.0 8.2 7.5 3.2
2.0 0.8 0.0 2.7 10.7 6.9 2.2
0.4 0.3 -3.8 -0.4 -3.3 2.9 1.0
-17.7 -18.8 -17.5 -18.3 -25.1 -23.5 -23.1
-3.1 2.9 -0.4 3.2 -0.2 0.7 1.1
-3.8 0.2 -7.3 -2.5 0.4 -0.5 -1.3
-1.4 -0.9 -3.5 -2.9 -1.0 -1.3 -1.9
59.2 71.0 87.0 78.4 68.4 63.0 61.8
Private Consumption
Table II.8.1:
Main features of country forecast - CROATIA
2021
Annual percentage change
GDP
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Terms of trade goods
Domestic demand
Inventories
Net exports
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
9. ITALY
86
Output growth reverts to trend
rebounded in the first quarter of 2023 and is thereafter expected to return to more modest
quarterly growth rates until end-2024. In 2021-22, households saved less, but kept consuming
and investing at a robust pace, thanks to the savings accumulated in previous years, to housing
energy efficiency tax credits and to other government support measures introduced to mitigate the
impact of high en
and pick up modestly in 2024, on the back of lower inflation and rising wages. Companies are
expected to use profits to fund new investments, thus countering the negative effects of higher
interest rates and tighter lending conditions. Although they are being gradually phased out as from
this year, housing tax credits are set to continue supporting investment in construction, and related
equipment, for several more quarters. The rollout of RRF-financed projects is also expected to prop
up investment, including in intangibles for the digital transition.
Exports of goods are projected to slow down less than imports, while exports and imports of
services rise in lockstep, after the post-pandemic rebound in transport and tourism. Thanks to a
considerable improvement in the terms of trade of goods, the external balance is set to improve
strongly between 2022 and 2024. However, external liabilities are more reactive than assets to the
higher interest rates, weighing on the 2023 current account through the primary income balance.
Employment continues to expand
The number of new permanent job contracts rose
more strongly than that of fixed-term contracts in
confident outlook, which is corroborated by survey
data. This heralds further jobs growth, although
employment is still forecast to increase less
quickly than GDP. As labour market participation is
expected to rise only slightly, the unemployment
rate is set to decrease in 2023-24. Wage growth
is expected to pick up somewhat, after subdued
contract renewals in 2022, as the multi-annual
bargaining gradually incorporates past inflation.
Moderate wage increases help tame inflation
Inflation is set to decelerate this year on the back of declining energy prices passing through to the
prices of industrial goods, food and eventually services. This downward trend is expected to
continue over the forecast horizon. The wage increase projection for 2024 underpins the slightly
higher core inflation forecast.
Further improvement in the fiscal outlook
In 2022, the government deficit decreased to 8.0% of GDP, from 9.0% in 2021. Both levels include
Real GDP growth is forecast to slow down to 1.2% in 2023 and 1.1% in 2024, as higher prices
dampen private consumption while investment, supported by government measures, continues to
expand vigorously. The inflation rate is set to moderate to 6.1% this year, thanks to falling energy
prices, and decrease further to 2.9% in 2024. The government deficit is projected to continue
declining, while the pace of public debt reduction is set to slow down due to a debt-increasing
stock-flow adjustment.
-10
-8
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.9.1: Italy - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Italy
87
the deficit-increasing impact of the new statistical treatment of some housing renovation tax
credits, now recorded as capital transfers and mostly accrued to 2021-22. In 2022, the primary
deficit improved by around 2 pps. to 3.6% of GDP, also thanks to the phasing out of most COVID-
19 temporary measures and despite the new budgetary measures to mitigate the impact of high
energy prices, with a net cost of 2.5% of GDP. In contrast, interest payments increased by almost
1% of GDP, mainly driven by the revaluation of inflation-linked securities. Fiscal revenue continued
benefiting from the strong nominal GDP growth and the impact of past provisions aimed at
reinforcing tax collection, which more than compensated for the reduction in the labour tax wedge.
Despite the renewal of public wage contracts for 2019-21, total primary expenditure declined by
around 1.4% of GDP as social transfers rose less than nominal GDP and capital spending fell.
In 2023, the deficit is expected to decrease to 4.5% of GDP, on the back of the partial phasing out
of energy support measures, projected to entail a net budgetary cost of 1.0% of GDP compared to
2.5% of GDP in 2022, and of the assumed complete phasing out of COVID-19 emergency
temporary measures, estimated to have amounted to 1.1% of GDP in 2022. Primary expenditure is
projected to fall, also thanks to the reduction of tax credits for housing renovation works and the
assumed savings from a new spending review, amounting to EUR 0.8 billion (0.05% of GDP). These
reductions are only partly offset by growing pension expenditure due to the indexation to past
inflation and by a pick-up in investment, also driven by NGEU-supported projects. Interest
expenditure is set to decrease to around 4% of GDP, owing to the impact of lower inflation on
indexed bonds and despite higher issuance rates. Current taxes are expected to continue growing,
notwithstanding the further cuts to the labour tax wedge for low- and medium-income earners.
In 2024, the government deficit is projected to reach 3.7% of GDP. The complete phasing out of
energy support measures and lower spending on intermediate consumption more than compensate
for an increase in pension outlays. In contrast, interest spending is expected to rise slightly to 4.1%
of GDP mainly following higher interest rates at issuance, while current taxes are projected to grow
more slowly than nominal GDP. This projection does not take into account potential cuts to the tax
-to-GDP ratio is set to decrease to 140.3% by 2024, thanks to improving primary
balances, while stock-flow adjustments, mainly related to the above-mentioned statistical
reclassification, are projected to provide a debt-increasing contribution.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
1787.7 100.0 0.1 0.5 -9.0 7.0 3.7 1.2 1.1
1024.7 57.3 0.2 0.2 -10.4 4.7 4.6 0.1 1.2
353.1 19.7 -0.1 -0.6 0.0 1.5 0.0 0.4 -1.3
364.9 20.4 -1.0 1.2 -7.9 18.6 9.4 2.6 1.4
584.5 32.7 2.1 1.6 -13.5 14.0 9.4 2.3 3.1
543.7 30.4 1.7 -0.7 -12.1 15.2 11.8 0.8 2.3
1821.7 101.9 0.2 0.2 -8.6 7.7 2.9 1.0 1.1
-0.1 0.2 -7.6 6.4 4.6 0.7 0.8
0.0 -0.4 -0.5 0.4 -0.4 0.0 0.0
0.2 0.7 -0.8 0.2 -0.5 0.6 0.3
0.0 0.1 -10.3 8.9 3.8 0.8 0.6
Unemployment rate (a)
9.5 9.9 9.3 9.5 8.1 7.8 7.7
1.9 1.8 3.8 -1.3 2.6 3.5 3.6
1.8 1.4 2.3 0.5 2.8 3.1 3.0
12.2 10.0 17.4 15.0 10.0 8.7 9.0
1.6 0.9 1.6 0.6 3.0 5.9 2.7
1.7 0.6 -0.1 1.9 8.7 6.1 2.9
-0.2 1.6 4.5 -6.2 -10.1 4.0 2.2
1.1 3.4 4.1 2.8 -1.1 0.7 1.6
-0.2 3.3 3.9 3.1 -1.3 0.0 1.3
-3.1 -1.5 -9.7 -9.0 -8.0 -4.5 -3.7
-1.4 -1.9 -5.2 -8.4 -8.6 -5.3 -4.5
120.2 134.1 154.9 149.9 144.4 140.4 140.3
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.9.1:
Main features of country forecast - ITALY
2021
Annual percentage change
GDP
10. CYPRUS
88
Following robust growth of 5.6% in 2022, economic activity is expected to slow down to 2.3% and
2.7% in 2023 and 2024 respectively amid persistent inflationary pressures and rising interest
rates. After peaking in 2022 at 8.1%, inflation is set to abate as global energy prices moderate and
supply chain disruptions ease, notwithstanding upward pressures coming from a partial indexation
of wages. The labour market is proving resilient. Cyprus is forecast to maintain a government
budget surplus over the forecast horizon, while the public debt is expected to continue decreasing,
to 72.5% of GDP in 2024.
Slow down after 2022 solid growth
Real GDP increased by 5.6% in 2022, driven mostly by domestic demand. Private consumption
expanded strongly due to pent up demand following the pandemic and to a significant
employment increase. A buoyant influx of foreign investment in real estate pushed up investment
in construction. Tourism performed better than expected, despite the loss of the Russian market,
and reached about 90% and 80% of the pre-pandemic levels, in revenue and arrivals respectively.
Other exports of services such as ICT, financial and professional services continued to expand, also
rendering the economy less dependent on tourism.
The slowdown of economic activity started in the
last quarter of 2022, and it is expected to
continue through 2023. The economy is set to be
dampened by the still high inflation eroding the
purchasing power of households, by higher
interest rates negatively affecting investment, and
by weakening growth m
trading partners affecting external demand. The
partial indexation of wages implemented in
January 2023 is set to somewhat cushion the
negative impact on consumption. The
implementation of the Cypriot Recovery and
Resilience Plan is expected to support investment,
notably in construction and equipment, over the
forecast horizon. Tourism and other export-oriented services are projected to continue growing,
albeit at a slower pace. Overall, real GDP is forecast to grow by 2.3% in 2023, before somewhat
picking up at 2.7% in 2024.
Labour market is improving
Robust economic growth pushed up employment by 2.9% and hours worked by 4.1% in 2022. The
unemployment rate decreased more than initially expected, to 6.8% in 2022, down from 7.5% in
2021. It is forecast to slightly increase in 2023 to 6.9%, in line with the slowdown of GDP growth,
before declining to 6.4% in 2024 as labour-intensive services sectors are set to continue
expanding.
Inflation to moderate in 2023
Inflation reached a peak of 8.1% in 2022 on the back of soaring global commodity prices. As
global energy prices are moderating and supply chain disruptions are phasing out, inflation is
expected to abate to 3.8% in 2023. However, the partial indexation of wages is set to have some
secondary upward effects. The expected moderation of global energy and other commodity prices
is projected to reduce inflation further to 2.5% in 2024.
-12
-8
-4
0
4
8
12
15 16 17 18 19 20 21 22 23 24
Graph II.10.1: Cyprus - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Cyprus
89
Projected budgetary surpluses, while downside risks remain
In 2022, the government headline balance turned into a significant surplus, reaching 2.1% of GDP.
The fiscal performance was stronger than expected, supported by buoyant revenue increases
driven by the continued economic growth, combined with the withdrawal of COVID-19 support
measures.
The budget is forecast to remain in surplus at 1.8% of GDP in 2023. Government revenue is
supported by the continued strong performance of private consumption, corporate earnings growth
and wage increases. Increases in public wages and pensions are putting upward pressure on
expenditure. This forecast assumes that the measures to mitigate the economic and social impact
of high energy prices on household energy bills amounting to 0.4% of GDP in 2023, compared
with 0.7% in 2022 will be fully phased out at the end of June 2023. Budgetary developments in
2023 are also affected by the assumed complete phasing out of COVID-19 emergency temporary
measures, which are estimated to have amounted to 0.3% of GDP in 2022.
For 2024, the budget surplus is expected to reach around 2.1% of GDP. The increase is driven by
the projected full phasing out of the measures to mitigate the impact of high energy prices,
implemented until June 2023.
The debt-to-GDP ratio is forecast to decrease over the coming years on the back of projected
nominal GDP growth (including due to the high GDP deflator) and primary surpluses. It is set to
reach 80.4% by the end of 2023, and further decline to 72.5% in 2024, down from 86.5% in 2022.
Risks to the fiscal outlook are tilted to the downside. In particular, the planned expansion of the
state-owned asset management company KEDIPES and a potential amendment to the wage
indexation system could negatively affect public finances.
mio EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
24019.0 100.0 2.2 5.5 -4.4 6.6 5.6 2.3 2.7
14242.7 59.3 2.6 3.9 -6.8 4.5 7.7 1.9 2.2
4806.1 20.0 1.5 12.0 11.5 9.0 0.1 1.7 1.6
4672.8 19.5 1.6 6.9 4.5 -4.2 6.6 0.8 1.7
20804.4 86.6 3.7 8.7 2.2 13.6 13.7 2.8 3.7
20102.7 83.7 3.8 9.5 3.2 9.0 18.8 2.1 2.9
21989.8 91.6 2.3 3.6 -6.0 5.0 6.8 2.5 2.0
2.3 5.5 -1.6 3.6 5.9 1.7 1.9
0.1 0.5 -2.0 -0.6 3.7 0.0 0.0
-0.1 -0.5 -0.7 3.6 -3.9 0.7 0.8
1.7 3.8 -1.2 1.3 2.9 1.7 1.9
Unemployment rate (a)
8.6 7.1 7.6 7.5 6.8 6.9 6.4
1.7 4.4 -0.5 3.8 3.8 6.3 4.0
1.2 2.7 2.8 -1.4 1.0 5.6 3.2
3.7 5.7 12.5 10.9 4.8 6.7 7.7
1.6 1.3 -1.2 2.9 6.4 5.0 2.8
1.5 0.5 -1.1 2.3 8.1 3.8 2.5
0.7 0.0 -1.2 -0.6 -2.1 0.7 0.3
-22.6 -20.0 -19.2 -18.0 -21.8 -21.0 -20.8
-8.5 -5.5 -10.0 -6.8 -9.1 -7.3 -6.9
-2.9 1.3 -5.8 -2.0 2.1 1.8 2.1
2.5 -0.1 -4.5 -2.4 0.7 0.9 1.3
76.2 90.8 113.8 101.2 86.5 80.4 72.5
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.10.1:
Main features of country forecast - CYPRUS
2021
Annual percentage change
GDP
11. LATVIA
90
Private consumption and investment set to
drive growth in 2023 and 2024
In 2022, GDP growth reached 2.8%, on the back
of strong growth in private consumption and
exports. Real private consumption growth started
the year on a strong footing, but surging inflation
and slowing employment growth put a brake to it..
Investment growth also slowed towards the end
of the year hampered by surging construction
prices and delays in EU-funded programme
implementation. Exports benefitted from the post
covid recovery in tourism as well as from high
lumber and grain prices.
Growth is expected to be slower at the start of 2023, as real disposable income growth remains
negative and households grapple with high heating bills. However, slowing inflation is set to
th.
Additionally, EU-funded investments, including those financed by the RRF, are projected to pick up
in the second half of 2023. Export growth is expected to slow down due to weakening foreign
demand, construction activity in particular. While growth is set to reach a brisk pace by the second
half of the year, annual GDP growth is only expected to reach 1.4% in 2023 given the slow growth
at the end of 2022 and the beginning of this year.
In 2024, growth is forecast to pick up to 2.8%. A marked slowdown in inflation is set to foster
private consumption. A further increase in EU-funded investments and a decline in prices of
construction materials are expected to boost investment. Export growth is projected to pick up as
the inflation slowdown elsewhere in the EU boosts foreign demand.
Labour market expected to loosen temporarily
The slowdown of growth at the turn of the year is expected to loosen up the labour market slightly,
as evidenced by recently falling job vacancies and the edging up of the unemployment rate.
However, once growth picks up in the second part of 2023, the labour market is expected to
tighten on the back of increasing demand and falling supply due to ageing. Wage growh is set to
stay strong over the forecast period, supported by labour market tightness and minimum wage
increases.
Inflation to slow gradually
Fuelled by energy price surge, HICP inflation increased rapidly throughout last year, averaging
17.2%. Both energy prices and consumer inflation peaked in early Autumn 2022, but have been
declining only slowly since. Going forward, energy price inflation is set to turn negative and other
price components, except services, to slow considerably. Overall, inflation in 2023 is forecast at
9.3%, with core inflation only slightly higher. By 2024, inflation is expected to slow down to 1.7%,
In 2023, GDP is forecast to grow by 1.4%, hampered by high inflation weighing on private
consumption and a delay in public investment programmes. Growth is expected to pick up by mid-
year as inflation subsides and investment gains momentum. The economy is set to continue on
this trajectory in 2024 with GDP growth reaching 2.8%. Inflation is expected to take some time to
slow, staying close to double digit levels in 2023. By 2024, a decline in energy prices and a
broad-based slowdown in other price categories are set to bring inflation down to 1.7%.
Unemployment is forecast to decrease slightly in 2023 and then some more in 2024. The general
government deficit is set to decrease to 3.8% of GDP in 2023 and to 2.7% in 2024.
-8
-6
-4
-2
0
2
4
6
8
10
12
15 16 17 18 19 20 21 22 23 24
Graph II.11.1: Latvia - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Latvia
91
but core inflation is projected to remain above 2% as services price growth is expected to
accelerate.
Deficit set to decrease in 2023
The government deficit reached 4.4% of GDP in 2022, down from 7.0% in 2021 on account of
substantially less pandemic-related support.
In 2023, the government deficit is forecast to drop to 3.8% of GDP, mainly due to lower projected
expenditures as a share of GDP, as tax revenue is expected to grow close to nominal GDP. Deficit-
decreasing contributions are expected from the phasing out of most pandemic-related support
measures and to a somewhat lower projected fiscal impact of measures to cushion the impact of
high energy prices. The net budgetary cost of the energy support measures is projected in the
Commission 2023 spring forecast at 1.0% of GDP in 2023, compared with 1.5% in 2022. The
Commission currently assumes a full phasing out of energy support measures in 2024. An
additional deficit-lowering effect is expected from the discontinuation of 2022 budgetary support
to create natural gas reserves to secure energy supply. At the same time, deficit increasing
pressures are provided by expenditure measures included in the 2023 budget package, such as a
wage increase for administration and medical personnel, additional financing for oncology, science
and research, as well as a substantial public investment package for defense and internal security.
Moreover, higher spending is expected for pensions and allowances, and to provide temporary
protection to displaced persons from Ukraine. In 2024, the government deficit is projected to
decrease to 2.7% of GDP. On the expenditure side, the impact of the expected phasing out of
energy-related support measures after the first half of 2023 will more than offset the additional
expenditure foreseen in the 2023 budget for 2024, including public wage increases and defence
investment, as well as higher social benefit and interest spending.
The forecast also incorporates expenditure financed by the RRF grants, which is set to gradually
increase from 0.3% of GDP in 2023 to 0.6% of GDP in 2024.
The debt-to-GDP ratio is expected to reach 39.7% in 2023 and increase slightly to 40.5% in 2024
due to higher nominal GDP growth.
mio EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
33616.5 100.0 3.2 2.6 -2.3 4.3 2.8 1.4 2.8
19220.5 57.2 3.5 0.2 -4.6 8.1 8.1 3.0 2.8
7097.8 21.1 1.3 3.9 2.4 4.4 2.8 0.9 1.3
7499.6 22.3 3.5 6.9 -2.6 2.9 0.7 1.7 4.0
21387.0 63.6 6.7 2.1 -0.3 5.9 9.1 2.4 2.5
22541.1 67.1 6.0 3.1 -0.3 15.3 11.7 1.5 1.8
32995.8 98.2 3.1 2.7 -0.9 2.4 3.2 1.7 2.9
3.7 2.4 -2.8 6.2 5.4 2.4 2.8
0.2 0.8 0.5 3.5 -0.6 -1.2 -0.1
-0.5 -0.6 0.0 -5.4 -2.0 0.5 0.4
-0.4 -0.1 -2.3 -2.6 2.7 0.1 1.6
Unemployment rate (a)
11.4 6.3 8.1 7.6 6.9 6.8 6.5
9.8 7.8 5.0 11.1 9.0 10.8 5.3
6.0 5.0 4.9 3.8 9.0 9.4 4.1
4.0 9.1 14.6 13.9 5.1 4.5 5.2
4.7 2.6 1.0 6.5 13.1 8.9 2.7
3.9 2.7 0.1 3.2 17.2 9.3 1.7
1.2 0.9 3.2 2.6 0.1 2.0 0.0
-14.4 -8.6 -5.1 -8.3 -11.5 -9.7 -9.4
-5.3 -0.6 2.6 -4.2 -6.1 -3.4 -2.7
-2.4 -0.6 -4.4 -7.1 -4.4 -3.8 -2.7
-1.5 -1.4 -3.4 -6.7 -4.2 -3.5 -2.6
30.3 36.5 42.0 43.7 40.8 39.7 40.5
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.11.1:
Main features of country forecast - LATVIA
2021
Annual percentage change
GDP
12. LITHUANIA
92
Economic activity is dampened by geopolitical tensions
-scale invasion of Ukraine, economic activity was dampened by contracting
private consumption over the last three quarters of 2022, driven by a drop in consumer confidence
and household disposable income. Large supply chain disruptions drove input prices upwards and
hindered the performance and competitiveness of industries in some sectors, putting a drag on
investment. As a result, economic growth turned negative in the fourth quarter (-0.5%) and annual
growth slowed down to 1.9% in 2022.
For 2023, economic activity is set to continue to be impacted by economic and geopolitical
uncertainty. Growth is expected to benefit from a slight pick-up of private consumption, thanks to
easing price pressures and improved purchasing power. Nonetheless, the high price of basic
consumer goods, such as food and energy, is set to continue to subdue consumer spending. In
addition, EU-funded investments, including those financed by the RRF, are projected to pick up and
drive investments upwards. This should more than offsets the projected weak performance of
some industries in light of weakening external demand and the tightening of financial conditions,
resulting in a milder export growth. As a result, yearly growth in 2023 is expected to be only
slightly positive at 0.5%.
In 2024, raw material and consumer prices are set to grow at a slower pace, while domestic and
foreign demand is projected to strengthen. Coupled with further increased RRF-funded
investments, economic activity in Lithuania is forecast to start gathering momentum with real GDP
growth reaching 2.7% in 2024.
Labour market remains tight
Some signs of cooling in the labour market
emerged at the turn of the year, with the number
of vacancies decreasing and a slight pick-up in the
unemployment rate. The slowdown in GDP growth
is expected to negatively impact employment
growth and lead to an uptick in unemployment.
Over 2023, this is set to be translate into an
overall decrease in employment of 0.6%, matched
with an unemployment rate of 6.6%. However, as
GDP growth picks up in 2024, the labour market is
expected to tighten, partly due to adverse
demografic developments, leading to a slight
decrease of unemployment to 6.5%.
Inflation is on a declining trajectory
HICP inflation in Lithuania surged to 18.9% in 2022 but is expected to moderate to 9.2% in 2023
and 2.2% in 2024. Prices growth was already on a deceleration trend at the turn of the year,
thanks to declining energy prices, owing in particular to the compensation of gas and electricity
weighing on private consumption. In 2024, real GDP is projected to slowly pick-up to 2.7%, as
input costs and consumer prices subside and investment is set to be boosted by RRF funds. HICP
inflation is forecast to slow down to 9.2% in 2023 on the back of a decline in energy and input
prices, before further decelerating in 2024 as price pressures continue to ease. In 2023, the
general government deficit is projected to increase to 1.7% of GDP, mainly due to increases in
social spending, public investments, and decreasing tax revenue. In 2024 it is forecast to decline
to 1.4%.
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.12.1: Lithuania - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Lithuania
93
prices for households and businesses. In the coming months, core inflation is projected to stay
elevated, but to decrease over the forecast horizon. HICP inflation is set to be dampened by the
expected decline in the price of global energy and other commodities, and by the gradual easing of
price pressures i
still remaining above HICP inflation levels.
General government deficit set to increase in 2023
In 2022, the general government deficit decreased to 0.6% of GDP due to lower-than-expected
expenditure on energy support measures and intermediate consumption.
In 2023 the deficit is projected to increase to 1.7% of GDP. The government is planning to
implement several projects that were partly scheduled for 2022 and should drive up intermediate
consumption. In combination with additional spending on social benefits, indexation of pensions,
public investment and higher interest expenditure this is expected to further increase the
government deficit. At the same time tax and social security contributions revenue (as % of GDP) is
expected to slightly decrease. The assumed decline of energy prices is set to contribute to limit the
net budgetary cost of energy support measures to 0.7% of GDP in 2023, compared with 1.3% in
2022. Deficit developments in 2023 are also affected by the assumed phasing out of COVID-19
emergency temporary measures, which are estimated to have amounted to 0.4% of GDP in 2022
The deficit is projected to decline to 1.4% of GDP in 2024 as measures to mitigate the impact of
high energy prices are phased out. The Commission currently assumes the net cost of energy
support measures at 0.1% of GDP in 2024. However, the permanent expenditure measures aimed
at increasing household disposable income (such as increases in social benefits and pensions) and
raising interest expenditure are expected to continue to weigh on the public sector balance.
In 2023, public debt is forecast to reach 37.1% of GDP, and in 2024 the debt-to-GDP ratio is
projected to decrease slightly to 36.6% due to denominator effects.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
56.2 100.0 3.7 4.6 0.0 6.0 1.9 0.5 2.7
32.7 58.3 4.1 2.7 -2.4 8.0 0.5 0.1 3.1
9.8 17.5 0.8 -0.3 -1.4 0.9 0.5 0.5 0.2
12.0 21.4 5.2 6.6 -0.2 7.8 2.6 2.7 4.5
45.2 80.5 7.5 10.1 0.4 17.0 11.9 1.9 4.8
42.7 76.0 7.2 6.0 -4.5 19.9 12.3 2.0 4.9
54.0 96.1 3.6 4.2 0.6 4.9 2.0 1.2 3.4
4.1 3.0 -1.8 6.5 0.9 0.7 2.8
-0.1 -1.6 -1.8 -0.2 0.7 0.0 -0.1
-0.1 3.2 3.5 -0.3 0.2 -0.1 0.1
-0.1 0.6 -1.6 1.2 5.1 -0.6 -0.3
Unemployment rate (a)
10.1 6.3 8.5 7.1 6.0 6.6 6.5
7.5 10.6 6.6 11.9 10.6 10.4 6.2
3.6 6.3 4.9 6.8 14.0 9.1 3.1
2.6 3.8 12.4 5.8 3.9 4.0 4.7
3.2 2.7 1.9 6.3 16.8 10.4 3.1
2.7 2.2 1.1 4.6 18.9 9.2 2.2
0.6 1.3 1.5 -6.4 -11.1 4.4 0.6
-7.6 -4.8 -0.8 -5.2 -11.0 -7.9 -7.6
-3.9 3.5 7.3 1.1 -5.3 -1.1 -0.1
-2.4 0.5 -6.5 -1.2 -0.6 -1.7 -1.4
-0.7 -1.1 -6.4 -1.6 -0.4 -0.6 -0.3
30.0 35.8 46.3 43.7 38.4 37.1 36.6
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.12.1:
Main features of country forecast - LITHUANIA
2021
Annual percentage change
GDP
13. LUXEMBOURG
94
Growth set to recover pre-pandemic levels in 2024
Real GDP contracted by 3.8% q-o-q in 2022-Q4
on the back of a decrease in private consumption,
exports and investment, in particular in the
construction sector. The weakening of activity was
mainly observed in the financial sector, with a
sharp drop in value added (-10.8% q-o-q) mainly
caused by the volatility and decline in market
valuation of financial assets. In 2022, GDP growth
was 1.5% y-o-y, driven by private and public
consumption.
Private consumption growth is projected to
rebound, supported by the use of excess savings
and by the introduction of additional government support measures. Domestic demand is also
underpinned by the growth in government consumption due to higher compensation of employees
and intermediate consumption. Nevertheless, investment is expected to remain weak as rising
interest rates weigh on the borrowing capacity and on the demand for mortgages. Furthermore, a
positive contribution from net exports, due to a recovery of export and import growth, is set to
result in a GDP growth of 1.6% in 2023, below the pre-pandemic trend. In 2024, with an expected
GDP growth rate of 2.4%, the economy is set to return to its pre-pandemic growth trend, mainly
supported by a recovery in investment and a further positive contribution from net exports.
Labour market set to remain resilient
Following the slowdown in economic activity in 2023, the labour market is forecast to weaken
slightly, but remain resilient. Employment growth is set to decline from 3.5% in 2022 to 2.4% in
2023 and to 2.3% in 2024. Unemployment dropped to 4.6% in 2022 and is expected to increase
only moderately to 4.8% in 2023 and 5.0% in 2024. This can be explained by the still high job
vacancy rate and by the improvement in employment prospects in some sectors such as
construction.
Fiscal support to lower headline inflation, while core inflation edges up
Headline inflation increased to a record high of 8.2% in 2022, mainly driven by energy and food
price increases. Energy price inflation is, however, expected to moderate over the forecast horizon,
amid assumed lower energy prices supported by the Solidaritéitspak. HICP inflation is, thus, set to
drop to 3.2% in 2023 and 2.6% in 2024. In turn, core inflation is forecast to rise from 4.4% in
2022 to 5.1% in 2023, reflecting higher wages and non-industrial goods prices. In 2024, core
inflation is projected to decline to 3.2% following a decline in all its components.
Real GDP growth is projected to remain low in 2023, at 1.6%, before recovering to 2.4% in 2024.
The below-average growth in 2023 is mainly due to lower private consumption and weaker
investment amid tighter financing conditions and geopolitical uncertainty. After a record high in
2022, headline inflation is set to decelerate in 2023 and 2024, supported by the implementation
of measures to mitigate the impact of high energy prices. These measures are also expected to
weigh on the general government balance in 2023 and 2024. Public deficit is projected to
increase the general government debt-to-GDP ratio, although it is set to remain at a low level.
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.13.1: Luxembourg - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Luxembourg
95
Support measures drive the decline in the general government balance
In 2022, government finances registered a small surplus of 0.2% of GDP mainly driven by high
revenue growth from a strong labour market and high inflation-related tax income. In 2023, the
government balance is projected to turn into a deficit of 1.7% as a result of moderate GDP growth
and of the increase in expenditure due to the Solidaritéitspak. The net budgetary cost of the energy
support measures is projected in the Commission 2023 spring forecast at 1.1% of GDP in 2023,
compared with 0.5% in 2022.
In addition, the automatic wage indexation raises expenditure on compensation of employees and
social transfers. Revenue growth is expected to decline in 2023, from the high growth rates
observed in 2022, mainly due to lower GDP growth and inflation, the 1 pp. VAT reduction
and a
slowdown in activity in the housing and fund management sector. Nevertheless, revenue continues
to benefit from the strong labour market via higher personal income tax and social contributions.
In 2024, the deficit is projected at 1.5% of GDP as a result of a lower growth rate in expenditure,
even though the Solidaritéitspak has been extended until the end of 2024. The Commission
currently assumes the net cost of energy support measures at 0.5% of GDP in 2024. Revenue is
also expected to grow at a slower pace, on the back of the projected decline in inflation, and
therefore less wage indexations, and of the reversal of the 1 pp. VAT reduction. Public investment
is planned to remain above 4% of GDP until 2024, geared towards the green and digital transition,
public infrastructure, and housing. The general government deficit is set to push the debt-to-GDP
ratio from 24.6% in 2022 to 27.0% in 2024.
mio EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
72295.0 100.0 2.6 2.3 -0.8 5.1 1.5 1.6 2.4
21864.6 30.2 2.3 2.3 -7.3 9.5 2.8 2.4 2.7
12619.5 17.5 2.8 2.6 7.8 5.4 3.8 3.7 2.3
11963.8 16.5 2.1 9.1 -3.6 6.7 -0.5 -2.9 1.6
152855.9 211.4 4.4 4.5 0.2 9.7 -0.6 2.6 3.6
127735.9 176.7 4.7 5.7 -0.4 11.8 -0.9 2.7 3.8
50469.8 69.8 1.5 -3.6 1.8 6.2 2.5 2.0 2.1
1.7 2.7 -1.7 5.0 1.4 0.9 1.5
0.1 0.1 -0.3 0.4 -0.1 0.0 0.0
0.8 -0.4 1.2 -0.3 0.2 0.7 0.9
2.8 3.5 1.7 3.0 3.5 2.4 2.3
Unemployment rate (a)
5.2 5.6 6.8 5.3 4.6 4.8 5.0
2.6 1.9 1.2 6.0 5.4 6.9 3.4
2.9 3.1 3.8 3.9 7.4 7.8 3.3
: : : : : : :
3.0 1.4 4.7 6.2 6.4 5.5 3.4
2.2 1.6 0.0 3.5 8.2 3.2 2.6
0.7 0.4 1.8 0.1 -4.0 2.2 0.2
-0.4 3.3 3.0 2.3 0.8 1.4 1.4
4.5 -1.4 3.1 5.3 5.7 7.2 7.4
1.2 2.2 -3.4 0.7 0.2 -1.7 -1.5
2.0 2.5 -2.0 0.8 0.5 -1.1 -0.8
16.0 22.4 24.5 24.5 24.6 25.9 27.0
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.13.1:
Main features of country forecast - LUXEMBOURG
2021
Annual percentage change
GDP
14. MALTA
96
Growth remains robust
Supported by strong growth in private consumption and investment, real GDP growth reached 6.9%
in 2022, which is higher than projected in the Winter Forecast. Growth also benefited from the
strong performance of the services sectors in general. Tourism in 2022 rebounded quickly and
above earlier expectations, both in terms of total number of visitors and tourism expenditures. The
growth impact of a marked jump in gross fixed capital formation, related to a large one-off
equipment purchase operation, was compensated by a strong increase in imports, resulting in a
negative contribution of net exports.
In 2023, real GDP is forecast to grow at a slower pace, by 3.9%, as high inflation limits private
consumption and the positive impulse from tourism, following the post-pandemic re-opening,
moderates. In 2024, real GDP growth is expected to pick up to 4.1%.
Employment grows strongly
Malta maintains a high pace of employment growth. Employment increased by an impressive 6.0%
in 2022. Demand for labour increased across various sectors of the economy, both public and
private, and was especially strong in tourism and administrative services. The labour force is set to
continue growing at a robust pace in 2023 and 2024 in line with population growth as the country
continued to attract foreign workers. Labour and skills shortages are expected to remain the main
to 2.9% in 2022 and is expected to remain around this level in 2023 and 2024.
Inflation remains high despite unchanged
energy prices
HICP inflation in 2022 reached 6.1%, even though
the energy prices were fixed at 2020 levels by
government intervention. The Maltese authorities
further confirmed their commitment to limiting
energy inflation in 2023 and 2024. Nonetheless,
inflation in 2023 is expected to stay high at 5.4%,
pushed by increasing prices for imported goods
(especially food), tourism services and housing
maintenance services. In 2024, inflation is
projected to slow to 2.8% as price growth in
The government deficit, despite decreasing, remains high in 2023 and 2024
The government deficit is expected to decrease from 5.8% of GDP in 2022 to 5.1% in 2023,
remaining at a significant level. It is then set to decrease, albeit slowly, to 4.5% in 2024.
Thanks to lower international energy prices, the drop in public expenditure related to measures to
mitigate the impact of high energy prices is the main factor determining the reduction of the
The Maltese economy grew strongly by 6.9% in 2022, driven by domestic demand and export of
services, benefiting from the further recovery in tourism. Growth is forecast to moderate to 3.9%
in 2023, as high inflation affects household disposable incomes and consumption. GDP growth is
then set to reach 4.1% in 2024, supported by continuing net migration flows. Sizeable
government measures helped to keep energy prices unchanged in Malta. They are expected to
remain in place also in 2023 and 2024. As a result, the general government deficit stood at 5.8%
in 2022, among the highest in the EU. It is expected to gradually decrease in 2023 and 2024.
Thanks to robust GDP growth, public debt is forecast to remain below 60% of GDP.
-12
-8
-4
0
4
8
12
16
15 16 17 18 19 20 21 22 23 24
Graph II.14.1: Malta - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Malta
97
deficit level in 2023. The net budgetary cost of the energy support measures is projected at 1.7%
of GDP in 2023, compared with 2.5% in 2022. The Commission currently assumes the net cost of
energy support measures at 1.5% of GDP in 2024. Deficit developments in 2023 are also affected
by the assumed complete phasing out of COVID-19 emergency temporary measures, which are
estimated to have amounted to 0.8% of GDP in 2022. The expected phasing out of the national
airline restructuring costs and the growth in the government wage bill remaining below nominal
GDP growth are also expected to contribute to the reduction of the deficit. On the other hand,
intermediate consumption and gross fixed capital formation are expected to increase.
In 2024, the reduction of the deficit is set to be driven by a diminishing impact of energy-related
measures and the phasing out of the national airline early retirement schemes and is partially
offset by an increase of the interest expenditure. The contained growth of intermediate
consumption expenditure and of the public wage bill are also set to contribute to lower the deficit
ratio.
Tax revenue is expected to increase over the forecast horizon in line with nominal GDP. Following
further growth in employment, the revenue from social contributions is also projected to grow. The
government debt-to-GDP ratio is set to increase to 54.8% in 2023 and reach 56.1% in 2024 as
the primary balance, i.e., the budget balance net of interest, remains negative.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
15.0 100.0 4.4 7.0 -8.6 11.8 6.9 3.9 4.1
6.3 42.1 3.1 4.0 -10.5 8.1 10.1 3.8 4.0
3.0 20.1 2.6 13.2 15.8 6.9 2.4 5.0 3.3
3.0 20.3 6.6 11.8 -6.6 10.9 30.4 -5.0 3.5
25.5 169.7 7.0 10.1 -1.6 6.3 6.4 3.6 3.0
23.0 153.3 6.7 11.2 2.0 3.8 9.7 2.2 2.7
14.0 93.5 3.8 7.0 -9.9 14.4 4.4 3.9 4.1
3.5 6.2 -3.5 7.2 10.9 1.4 3.2
0.0 0.5 0.5 -0.3 -0.1 0.0 0.0
0.9 0.3 -5.7 4.9 -4.0 2.6 0.9
3.0 5.7 2.8 2.9 6.0 2.3 2.3
Unemployment rate (a)
6.1 3.6 4.4 3.4 2.9 2.9 2.9
3.7 4.5 -0.4 4.6 2.8 5.6 3.1
2.3 3.2 12.0 -3.7 2.1 3.9 1.3
: : : : : : :
2.3 2.3 1.6 1.9 5.2 4.2 3.1
2.0 1.5 0.8 0.7 6.1 5.4 2.8
0.0 -0.5 0.7 2.3 2.3 0.7 0.8
-17.6 -10.4 -9.5 -13.0 -20.6 -19.5 -18.3
-0.8 8.1 2.4 5.0 1.6 3.8 4.1
-2.2 0.5 -9.7 -7.8 -5.8 -5.1 -4.5
-0.5 -1.3 -5.3 -7.1 -5.5 -4.6 -3.9
62.3 40.3 52.9 55.1 53.4 54.8 56.1
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.14.1:
Main features of country forecast - MALTA
2021
Annual percentage change
GDP
15. THE NETHERLANDS
98
A strong but slowing economy
The Dutch economy grew significantly in 2022, by 4.5%. Despite very high inflation, consumer
spending remained strong, with consumption growth reaching 6.5%. This was mostly thanks to
robust employment growth, an increase in wage growth and extensive measures taken by the
2022, with exports growing by 4.7%.
As households continue to adjust to increased prices, consumption growth is forecast to slow down
somewhat in 2023. A deceleration in employment growth further contributes to the weakening
consumption outlook. At the same time, tightening financial conditions and persistent labour
shortages are expected to weigh on business investment growth. Export growth is also projected to
expecting a slowdown in GDP growth. Annual growth is therefore forecast at 1.8%, with a
substantial part of it driven by a large carry-over from 2022.
In 2024, quarterly growth is forecast to pick up slightly as falling inflation and strong wage growth
are set to support real disposable incomes. In addition, the authorities have planned substantial
investments related to the green transition and defence, among others. With the carry-over from
2023 being limited, annual growth is projected to soften further to 1.2% in 2024.
The labour market remains tight
The Dutch labour market continues to remain very
tight, with the number of vacancies exceeding the
number of unemployed and several sectors
experiencing labour shortages. The unemployment
rate picked-up marginally from its low point
(3.2%) in the second quarter of 2022 but
remained historically low at 3.5% for 2022
overall. With GDP and employment growth slowing
down, the unemployment rate is forecast to
increase slightly to 3.8% in 2023 and 3.9% in
2024, remaining well below the unemployment
rates seen before the pandemic. On the back of a
tight labour market and surging inflation, nominal wage growth has been picking up considerably
since early 2022 and is forecast to reach 5.5% in 2023 and to stay strong in 2024 at 4.8%.
Declining energy prices bring inflation down
A strong decline in energy prices in early 2023 has resulted in a steep drop in inflation rates. HICP
inflation peaked in September 2022 at 17.1% and has decreased to 4.2% in March 2023. For
2023, the government put in place a price cap on gas and electricity to protect households from
further energy price shocks. The price cap helped to bring down energy inflation in the first quarter
of 2023 but is projected to have a more limited impact on HICP inflation in the remainder of the
The Dutch economy continues to expand, despite very high inflation. Consumer spending has been
resilient thanks to strong employment growth and an extensive support package put in place by
the authorities in 2022. Growth is expected to slow down to 1.8% in 2023 and 1.2% in 2024 as
the tightening financial conditions are projected to affect investment growth and as consumers
adjust their spending to the high price levels. The government deficit in 2023 is expected to
increase to 2.1% of GDP due to, among others, a combination of increased spending on (energy)
support measures and lower gas receipts. The deficit ratio is forecast to decrease to 1.7% in
2024. Government debt is projected to decrease to 48.8% by 2024.
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.15.1: The Netherlands - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, The Netherlands
99
year due to the steep drop in energy prices. Core inflation in the Netherlands remains high and
increased to 8.8% in the first quarter of 2023. Strong domestic demand, increasing wage growth
and extensive support measures all contribute to core inflation in the Netherlands standing well
above the euro area average. With wage growth and the labour market set to remain strong, core
inflation is forecast to only come down gradually throughout 2023 and 2024. However, the drop in
energy prices is expected to bring down annual HICP inflation substantially, to 4.9% in 2023 and
3.3% in 2024.
Additional spending adds to the 2023 deficit
In 2022, the general government budget was balanced. This was mainly driven by high revenues
from income taxes and the Dutch gas fields, and a significant decrease in COVID-19 related
expenditure.
For 2023, the government has put in place a package of both temporary and structural support
measures to mitigate the impact of high energy prices on households and companies. This package
includes a price cap on electricity and gas, a support scheme for energy-intensive SMEs and an
increase in the energy compensation benefit scheme for lower-income households. In addition,
different structural measures, such as a 10% rise in the minimum wage (which also affects the
level of some social security benefits) and a decrease in taxes on labour income, were adopted.
related to the green transition, education and housing, is set to weigh on public finances. The
deficit is expected to increase to 2.1% in 2023 before falling to 1.7% in 2024. The net budgetary
cost of the energy support measures is projected in the Commission 2023 spring forecast at 1.1%
of GDP in 2023, compared with 0.6% in 2022. The Commission currently assumes a full phasing
out of energy support measures in 2024. Deficit developments in 2023 are also affected by the
assumed complete phasing out of COVID-19 emergency temporary measures, which are estimated
to have amounted to 0.3% of GDP in 2022.
Despite the increase in expenditure, high nominal growth is projected to reduce the government
debt-to-GDP ratio, from 51.0% in 2022 to 49.3% in 2023 and 48.8% in 2024.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
855.5 100.0 1.4 2.0 -3.9 4.9 4.5 1.8 1.2
359.6 42.0 0.5 0.9 -6.4 3.6 6.5 2.1 1.2
224.3 26.2 1.6 2.8 1.6 5.2 1.5 2.3 1.4
184.6 21.6 1.4 6.2 -2.6 3.2 2.5 1.7 1.1
710.6 83.1 4.1 2.0 -4.3 5.2 4.7 3.8 1.8
622.7 72.8 3.9 3.2 -4.8 4.0 4.1 4.1 2.0
836.3 97.8 1.5 0.3 -5.1 6.0 2.6 2.7 1.5
0.9 2.3 -2.9 3.6 3.7 1.8 1.1
0.1 0.3 -0.8 -0.1 0.0 -0.1 0.0
0.4 -0.7 -0.1 1.4 0.9 0.0 0.0
0.7 2.2 0.6 2.0 4.0 1.0 0.7
Unemployment rate (a)
6.2 4.4 4.9 4.2 3.5 3.8 3.9
2.0 2.8 3.5 2.2 3.9 5.5 4.8
1.3 3.0 8.4 -0.6 3.3 4.7 4.3
13.8 18.3 24.9 23.7 14.9 16.3 16.3
1.3 3.0 1.9 2.4 5.3 6.1 2.6
1.5 2.7 1.1 2.8 11.6 4.9 3.3
0.0 0.9 1.0 -2.2 -3.1 3.3 0.3
8.7 7.4 7.7 7.3 6.2 7.5 7.4
6.0 6.9 5.1 7.3 4.4 6.0 6.1
-1.8 1.8 -3.7 -2.4 0.0 -2.1 -1.7
0.0 0.8 -1.3 -1.6 -0.7 -2.7 -1.9
56.8 48.5 54.7 52.5 51.0 49.3 48.8
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.15.1:
Main features of country forecast - NETHERLANDS
2021
Annual percentage change
GDP
16. AUSTRIA
100
A marked slowdown in growth in 2023
experienced a strong
expansion that was particularly pronounced in the
first half of the year and mainly driven by the
lifting of remaining pandemic-related restrictions,
as well as by the recovery of the tourism sector.
Overall, real GDP increased by 5.0%, which is the
highest rate since Austria joined the EU in 1995.
Following a stagnation in the final quarter of
2022, GDP is expected to have dropped by -0.3%
in the first quarter of 2023, due to a strong
reduction in goods exports. Furthermore, the
combination of high energy prices and
comparatively low wage growth is set to
negatively affect growth dynamics in the first half of 2023. Accelerating real wage growth, partly
due to government measures to mitigate the impact of high energy prices, is expected to lead to a
rebound in private consumption. Consequently, real GDP is forecast to increase by 0.2% in the third
first half of the year, overall growth is projected to amount to 0.4% in 2023.
The high retail energy prices are expected to gradually subside over the forecast horizon and
economic activity is set to pick up slightly in 2024, with real GDP growth forecast at 1.6%. This
dynamic is projected to be underpinned by stronger private consumption growth supported by
wage growth, which is expected to overcompensate HICP inflation growth. Additionally, an increase
in exports is projected.
Energy prices and wage developments drive inflation
In 2022, rising energy prices and, to some extent, increases in corporate profits, were the main
drivers pushing HICP inflation up to 8.6%. Retail energy prices are expected to remain high over the
first two quarters of 2023, but the gradual pass-through of lower wholesale energy prices to
consumers is expected to lead to a decline in inflation as from 2023-Q3. Lower energy inflation
and decelerating corporate profits due to high unit labour costs are set to lower headline inflation
in the second half of 2023. However, significant wage increases are projected to lead to
substantial increases in the price of services. The HICP inflation rate is forecast to reach 7.1% in
2023, before gradually decreasing further to 3.8% in 2024. Core inflation is projected to stay high
over the forecast horizon due to strong wage growth developments.
The labour market weathered the crisis well
The labour market performed well in 2022, with employment increasing by 2.6% and the
unemployment rate falling to 4.8%. Despite economic headwinds and persistent labour shortages,
the labour market is expected to remain resilient. Employment is set to slightly increase further
over the forecast horizon, mostly thanks to increased participation of women and older workers in
the labour market. The increase in labour supply is projected to outpace employment growth,
After strong growth in 2022, the economy is expected to slow down significantly on the back of
still high retail energy prices, increasing unit labour costs and weak export growth. In 2024,
growth is projected to slightly pick up again. HICP inflation is forecast to remain substantial in
2023, driven by significant wage increases, and to moderate only somewhat in 2024. The general
government deficit as well as the public debt-to-GDP ratio are set to decrease throughout the
forecast horizon, supported by strong nominal growth and a phase-out of COVID-19 and energy-
related measures.
-8
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.16.1: Austria - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Austria
101
causing the unemployment rate to increase slightly to 4.9% in 2023 and to 5.0% in 2024. Nominal
wages are expected to increase by 8.3% in 2023 and 6.6% in 2024. Therefore, real wages should
grow again in 2023 and 2024.
Deficit and debt remain on a downward path
In 2022, the general government deficit amounted to 3.2% of GDP and the debt ratio to 78.4%.
Over the forecast horizon, public finances are expected to improve, largely reflecting the phasing
out of COVID-19-related support measures, as well as of some of the measures implemented to
mitigate the economic and social impact of high energy prices. At the same time, new large-scale
energy-related measures, such as an electricity cost brake and energy cost subsidies for
companies, are set to limit the narrowing of the deficit. The net budgetary cost of the energy
support measures is projected in the Commission 2023 spring forecast at 1.8% of GDP in 2023,
compared with 1.5% in 2022. The Commission currently assumes the net cost of energy support
measures at 0.1% of GDP in 2024. Deficit developments in 2023 are also affected by the phasing
out of COVID-19 emergency temporary measures, which are estimated to have amounted to 1.0%
of GDP in 2022.
Overall, the general government deficit is forecast to improve to 2.4% of GDP in 2023 and to
1.3% in 2024. On the expenditure side, much of the budget improvements will rely on the phase-
out of new support measures in 2023 and 2024. However, the abolition of the tax bracket creep,
increasing interest rates, ageing-related costs, and the indexation of some social benefits are
expected to weigh on budget developments also beyond the forecast horizon. On the revenue side,
important tax sources, that is VAT, personal income taxes, and corporate profit taxes, as well as
social contributions, are set to grow dynamically in 2023 due to a robust labour market and still
high inflation. In 2024, revenues are overall projected to grow more moderately, despite a pick-up
in consumption and a robust labour market.
-to-
GDP ratio, which amounted to 78.4% at the end of 2022 and is expected to further decrease to
75.4% in 2023 and 72.7% in 2024, in line with a declining headline deficit.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
406.1 100.0 1.5 1.5 -6.5 4.6 5.0 0.4 1.6
202.5 49.9 1.2 0.5 -8.0 3.6 4.1 1.4 2.1
88.1 21.7 1.4 1.3 -0.5 7.8 2.9 -0.4 0.3
107.5 26.5 1.6 4.5 -5.3 8.7 -0.9 0.0 1.1
227.0 55.9 3.5 4.0 -10.7 9.6 11.1 1.5 2.5
224.7 55.3 3.5 2.1 -9.2 13.7 5.7 2.0 2.3
408.0 100.4 1.5 2.2 -5.4 4.1 3.9 0.2 1.6
1.3 1.6 -5.6 5.6 2.5 0.6 1.4
0.1 -1.3 0.1 0.7 -0.3 0.0 0.0
0.1 1.1 -1.1 -1.7 3.0 -0.2 0.2
1.1 1.1 -1.6 2.0 2.6 0.6 0.9
Unemployment rate (a)
5.5 4.8 6.0 6.2 4.8 4.9 5.0
2.2 2.8 1.8 2.8 4.6 8.3 6.6
1.8 2.3 7.1 0.3 2.2 8.5 5.9
14.5 14.0 18.7 17.6 13.2 13.2 14.5
1.8 1.5 2.6 1.9 5.0 7.2 4.2
1.9 1.5 1.4 2.8 8.6 7.1 3.8
-0.2 -1.0 0.8 -1.5 -4.5 2.3 0.8
0.1 1.1 0.9 -0.1 -0.1 0.9 1.3
2.3 2.5 3.0 0.4 0.2 0.8 1.2
-2.3 0.6 -8.0 -5.8 -3.2 -2.4 -1.3
-0.8 -0.7 -4.9 -4.4 -3.8 -2.5 -1.5
75.8 70.6 82.9 82.3 78.4 75.4 72.7
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Note : Contributions to GDP growth may not add up due to statistical discrepancies.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.16.1:
Main features of country forecast - AUSTRIA
2021
Annual percentage change
GDP
17. PORTUGAL
102
Tourism continues to support growth
Economic activity picked up at the beginning of 2023, helped by a further increase in tourism. GDP
growth is estimated at 1.6% (q-o-q) in 2023-Q1, strongly up from the rates recorded in the
previous three quarters. However, domestic demand remained weak, as private consumption was
constrained by the decline in purchasing power of households in previous quarters and investors
were confronted with higher interest rates. The external sector was the major growth driver in
2023-Q1, benefiting from the recovery in global supply chains and a very strong increase in
also supported the external balance, as the rebound in domestic hydropower production reduced
import demand for electricity and natural gas.
Economic growth is projected to weaken in 2023-
Q2 and to pick up again in the following quarters
against the backdrop of a gradual recovery in
consumption. Investment growth is also set to
improve, as the drop in global commodity prices
and the recovery in global supply chains, along
with the expected inflows of EU funds, are
projected to outweigh the negative impact of
higher interest rates. In full-year terms, real GDP
growth is forecast to slow down from 6.7% in
2022 to 2.4% in 2023 and 1.8% in 2024.
In the external sector, exports are projected to rise
much faster than imports in 2023 due mainly to the strong performance in tourism. In 2024,
imports are projected to grow somewhat faster than exports in line with the recovery in private
nce is forecast to benefit
substantially from the drop in energy prices in 2023 and higher prices in tourism, leading to a
marked improvement in the current account balance.
Labour activity rates rise faster than employment
The unemployment rate improved from 6.6% in 2021 to 6.0% in 2022. However, the monthly
figures increased in late 2022 and early 2023, driven by a strong rise in job-seeking activity while
employment grew only marginally. Both employment and activity rates reached record high levels
in early 2023 amid rising wage pressures. In annual average terms, unemployment is forecast at
6.5% in 2023 and 6.3% in 2024 amid a moderate increase in employment and real wages, broadly
compensating employees for the loss of purchasing power in 2022.
Inflation expected to moderate
After reaching a historic high of 10.2% (y-o-y) in 2022-Q4, HICP inflation moderated to 8.4% (y-o-
y) in 2023-Q1. The reduction was largely driven by lower energy prices while food prices remained
elevated. Inflation is set to moderate further over the forecast horizon, driven initially by the
energy price index and later by food and non-industrial goods. In 2023, the moderation in food
prices is also supported by a suspension of VAT rates for essential food products effective from 18
After a strong rebound in early 2023, economic growth is set to weaken in the second quarter of
the year and to pick up again thereafter. Headline inflation is projected to moderate although
wage adjustments amid record high employment are expected to keep pressure on prices of
forecast to improve to 0.1% of GDP in 2023 and 2024.
-10
-8
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.17.1: Portugal - Real GDP growth and
contributions
Net exports Investment
Priv. consumption Gov. consumption
Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Portugal
103
April until end-October. Overall, inflation is forecast at 5.1% in 2023 and 2.7% in 2024. Core
inflation is expected to move somewhat above the headline rate, as the projected recovery in real
incomes will weigh on prices of services, which are also set to moderate but at a softer pace.
Public finances with a favourable outlook
benefited from the strong economic rebound and the favourable labour market developments, with
tax revenue being boosted by inflation. In turn, the wind down of COVID-19-related measures
contributed to curb expenditure. Public investment continued to expand in 2022.
The general government deficit is forecast to narrow in 2023 to 0.1% of GDP and remain
unchanged in 2024. The dynamic growth of government revenues is expected to continue in 2023,
and to ease somewhat in 2024. Tax revenue is the main driver of this growth, particularly that
from indirect taxation, still reflecting the sustained elevated prices. Government expenditure is
projected to continue to expand, albeit at a lower pace than revenues. Upward pressure on current
spending, notably on social benefits and the public wage bill, is expected to persist through the
forecast horizon. Driven by the implementation of the Recovery and Resilience Plan (RRP) and other
EU-funded programmes, public investment is forecast to surge in 2023 and 2024. The tightening
of financing conditions is expected to increase interest expenditure. Downside risks to the fiscal
outlook are associated with the contingent liabilities arising from publicly guaranteed credit lines
and ongoing processes for financial rebalancing of public-private partnerships.
The net budgetary cost of the energy support measures is projected in the Commission 2023
spring forecast at 0.8% of GDP in 2023, compared with 2.0% in 2022. The Commission currently
assumes a full phasing out of energy support measures in 2024. Deficit developments in 2023 are
also affected by the assumed complete phasing out of COVID-19 emergency temporary measures,
which are estimated to have amounted to 0.8% of GDP in 2022.
-to-GDP ratio contracted considerably to 113.9% in 2022, already below pre-
pandemic levels. Thereafter, it is projected to continue on a downward path in 2023 and 2024,
driven by a favourable growth-interest rate differential and improvements in the general
government primary balance.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
214.7 100.0 0.5 2.7 -8.3 5.5 6.7 2.4 1.8
136.2 63.4 0.7 3.3 -7.0 4.7 5.8 0.5 1.5
40.4 18.8 0.1 2.1 0.3 4.6 1.7 2.7 1.3
43.6 20.3 -1.4 5.4 -2.2 8.7 3.0 2.9 3.6
89.4 41.6 4.3 4.1 -18.6 13.4 16.7 5.4 3.2
95.5 44.5 2.9 4.9 -11.8 13.2 11.1 3.3 3.6
212.6 99.0 0.5 2.5 -7.3 6.1 6.3 2.4 1.7
0.1 3.4 -4.9 5.5 4.6 1.4 1.9
0.0 -0.3 -0.5 0.3 0.0 0.0 0.0
0.4 -0.4 -3.0 -0.2 2.0 1.0 -0.2
-0.3 0.8 -1.8 1.9 2.0 0.5 0.6
Unemployment rate (a)
11.2 6.7 7.0 6.6 6.0 6.5 6.3
1.7 4.8 1.5 4.1 6.1 5.7 2.9
0.9 2.8 8.7 0.6 1.5 3.7 1.7
8.7 7.2 11.9 9.9 6.1 6.7 6.8
1.8 1.7 2.0 1.5 4.4 5.8 2.3
1.7 0.3 -0.1 0.9 8.1 5.1 2.7
0.2 0.4 1.6 0.5 -3.0 2.7 0.0
-8.8 -7.8 -6.5 -7.7 -11.4 -9.9 -10.1
-5.0 0.1 -1.2 -0.8 -1.5 1.0 0.8
-5.4 0.1 -5.8 -2.9 -0.4 -0.1 -0.1
-1.5 -0.9 -1.6 -1.3 -0.8 -0.8 -0.8
102.0 116.6 134.9 125.4 113.9 106.2 103.1
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.17.1:
Main features of country forecast - PORTUGAL
2021
Annual percentage change
GDP
18. SLOVENIA
104
Strong 2022 growth set to weaken in 2023-24
Despite a slowdown in the second half of the year, GDP grew by 5.4% in 2022. Growth was driven
by domestic demand and a rather strong build-up in inventories. Net exports provided a negative
contribution as terms of trade worsened for the second year in a row. The current account balance
turned negative after being in surplus since 2011. While the goods trade balance worsened by 6
pps of GDP, turning negative, the surplus in services balance continued to increase driven by
tourism. Employment continued to grow at a strong pace while real wages fell. Private
consumption increased by 8.9% aided by government support measures to reduce the impact of
high energy prices and household savings diminished.
Following two years of buoyant growth, private
consumption is projected to continue to increase,
albeit by a modest 1¾-2 % in 2023-24.
Consumption will be supported by employment
growth and rising wages, with the saving rate
expected to slightly increase toward the pre-
pandemic levels. Public investment is forecast to
remain strong due to the expected deployment of
RRF-financed measures and of EU Cohesion Policy
Funds. Despite the worsening financing conditions,
enterprises are expected to invest also into
productivity-enhancing technologies as labour
availability is limited and wages are projected to
increase rapidly. While the contribution from net exports to growth is projected to remain neutral,
improving terms of trade will help improve the trade balance and the current account which is set
to record a surplus. GDP is projected to increase by 1.2% in 2023 and by 2.2% in 2024.
Labour market continued to tighten
Low availability of workers continued to be the dominant factor in the labour market. Employment
is expected to increase by 0.7% in 2023 and by 0.5% in 2024. The unemployment rate is projected
to reduce further, from 4.0% in 2022 to 3.8% by 2024. After a relatively benign growth of 4.3% in
2022, wages are expected to increase by 7.7% in 2023 and by 5.3% in 2024 partly restoring the
loss in real wages.
Inflation decelerating only slowly
Inflation reached 9.3% in 2022 and remained at 9.9% in the first quarter of 2023 (compared to
the same quarter in 2022). Headline inflation peaked in the third quarter of 2022, but core
inflation has continued to accelerate. Inflation is expected to start moderating only from the
second half of 2023 and is projected to average 7.0% in 2023 and 3.8% in 2024.
-over from 2021 and
continued growth in the first half of the year. Growth is forecast to drop to 1.2% in 2023 and pick
up to 2.2% in 2024. Inflation is expected to remain high in 2023 and to recede somewhat in
2024. Employment is projected to improve further and the unemployment rate is set to fall from
the already low level. The general government deficit is forecast to narrow to 2.9% in 2024 after
reaching 3.7% in 2023.
-8
-3
2
7
12
15 16 17 18 19 20 21 22 23 24
Graph II.18.1: Slovenia - Real GDP growth and
contributions
Net exports Investment
Priv. consumption Gov. consumption
Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Slovenia
105
The fiscal outlook improved, but risks remain
The general government deficit stood at 3.0% of GDP in 2022. The deficit included the budgetary
costs of measures to mitigate the economic and social impact of high energy prices, which
accounted for 1.0% of GDP.
The deficit is projected to widen to 3.7% of GDP in 2023. The revenue ratio is forecast to stay
broadly stable, but higher EU cohesion funds at the end of the absorption period for the previous
multiannual financial framework 2014-2020 are projected to compensate for a drop in tax
revenue. On the expenditure side, public investment is projected to reach a historic peak at 6.1% of
GDP, financed both with an increased use of RRF and other EU funds as well as national sources.
Subsidies to the corporate sector to mitigate the economic impact of high energy prices are
forecast to increase significantly in 2023. The net budgetary cost of the energy support measures
is projected in the Commission 2023 spring forecast at 0.9% of GDP in 2023, compared with 1.0%
in 2022. The Commission currently assumes a full phasing out of energy support measures in
2024. Deficit developments in 2023 are also affected by the assumed complete phasing out of
COVID-19 emergency temporary measures, which are estimated to have amounted to 1.0% of
GDP in 2022.
In 2024, the deficit is set to narrow to 2.9% of GDP as energy-related measures are projected to
be withdrawn and public investment is expected to decline following the end of the previous EU
multiannual financial framework.
Projections for 2023 and 2024 are subject to several country-specific risks, including from costs of
reforming the public sector wage system that is being negotiated by the government. The fiscal
implications of the reform, as well as of other reforms currently being discussed (e.g. health and
long-term care), remain to be specified.
The debt-to-GDP ratio is projected to decrease from 69.9% in 2022 to 69.1% in 2023 and 66.6%
in 2024 due to the changes in the headline deficit and the large increase in nominal GDP.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
52.2 100.0 2.2 3.5 -4.3 8.2 5.4 1.2 2.2
26.7 51.1 1.8 5.3 -6.9 9.5 8.9 1.7 1.9
10.8 20.6 1.5 1.8 4.1 5.8 0.9 0.6 1.8
10.6 20.3 0.4 5.1 -7.9 13.7 7.8 3.9 3.8
43.7 83.6 5.9 4.5 -8.6 14.5 6.5 2.8 4.0
40.4 77.3 5.1 4.7 -9.6 17.6 9.8 2.8 4.2
51.5 98.6 2.1 3.4 -3.5 7.4 5.6 1.2 2.2
1.4 4.1 -4.4 8.5 6.3 1.9 2.2
0.1 -0.8 0.1 0.4 1.1 -0.6 0.0
0.7 0.2 0.0 -0.8 -2.1 0.0 0.0
0.6 2.5 -0.7 1.3 2.4 0.7 0.5
Unemployment rate (a)
7.1 4.4 5.0 4.8 4.0 3.9 3.8
3.7 5.0 3.4 7.9 4.3 7.7 5.3
2.1 3.9 7.3 1.1 1.4 7.2 3.6
13.3 13.4 22.7 18.7 8.6 9.1 11.3
2.0 2.3 1.3 2.6 7.2 7.3 4.3
2.3 1.7 -0.3 2.0 9.3 7.0 3.8
-0.4 0.4 0.8 -2.3 -2.8 2.0 1.1
-0.6 2.7 5.0 1.7 -4.3 -3.2 -2.5
0.4 6.1 7.7 4.0 -0.5 0.9 1.7
-3.4 0.7 -7.7 -4.6 -3.0 -3.7 -2.9
-3.1 -0.9 -6.1 -5.6 -5.0 -4.9 -3.7
48.7 65.4 79.6 74.5 69.9 69.1 66.6
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.18.1:
Main features of country forecast - SLOVENIA
2021
Annual percentage change
GDP
19. SLOVAKIA
106
Growth dependent on investment and exports
GDP growth in 2022 was relatively subdued, held back by poor exports and public consumption,
while private consumption held up relatively well. Economic activity is expected to accelerate in the
second half of 2023 as supply chain bottlenecks are set to ease, which will likely support export
also set to improve and should support demand for the main export products, including cars.
Government measures reduced the impact of rising energy prices for households and businesses in
early-2023, avoiding a price shock. After its strong growth in 2022, private consumption is
expected to stagnate this year due to declining real wages. Conversely, investment is set to
significantly grow thanks to EU structural funds, the RRF and government investments. Overall,
GDP growth is projected at 1.5% in 2023 before returning to stronger growth of 2.1% in 2024.
Labour market remains tight
The unemployment rate is expected to continue
decreasing from 6.2% in 2022 to 5.7% in 2023
and 5.5% in 2024, reflecting a very tight labour
market. The decline in the working age population
is one of the contributors to decreasing
unemployment, while the lack of workers is one of
the main challenges for Slovak companies. In
2022, nominal wages increased below the
inflation rate, leading to losses in real purchasing
power. As economic sentiment recovers, the
compensation of employees is expected to start
growing slightly faster than inflation, which is set to result in an increase in real wages in 2024.
Inflation set to remain elevated
Inflation soared to over 12% in 2022 due to high energy prices and the pass-through to other
components, particularly food. Due to government interventions, Slovak energy prices for
households are still significantly below market prices. Average household gas prices in the second
half of 2022 were the third lowest in the EU and are expected to increase only slightly in 2023. As
government measures start to be phased out in 2024, currently low energy prices will continue to
rise towards market prices, keeping energy inflation high. Consumer food prices grew swiftly in
2023-Q1, at over 25%. Further growth in food price inflation is not expected to continue given the
recent decline in input prices, including energy. Food prices are expected to be the main contributor
to overall inflation for the year, even if they are set to level off in 2023-Q2. Labour market
tightness is projected to contribute to more persistent growth of prices in the service sector.
Inflation is forecast at 10.9% in 2023 and at 5.7% in 2024.
Slovak GDP is expected to grow by 1.7% in 2023, supported by a strong expansion of investment
and by 2.1% in 2024 mainly due to a recovery in exports as supply chain bottlenecks are
expected to disappear. Since the energy prices were mostly fixed in 2022, convergence with the
market prices is set to push the inflation to 10.9% in 2023 and 5.7% in 2024. Core inflation
remains strong, fuelled by rising prices of food and services. New measures, including those
aimed at mitigating high energy prices, are projected to lead to an increase in the public deficit to
6.1% of GDP in 2023. It is then set to decrease to 4.8% as most of the measures are expected to
be phased out.
-8
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.19.1: Slovakia- Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Euro Area Member States, Slovakia
107
Budget deficit to increase again in 2023
After a low deficit of 2.0% in 2022, the general government deficit is expected to increase to 6.1%
in 2023, driven by expenditure measures adopted by the government. New measures to mitigate
the impact of high energy prices are set to bring the deficit back to a high level in 2023. The net
budgetary cost of the energy support measures is projected in the Commission 2023 spring
forecast at 2.0% of GDP in 2023, compared with 0.2% in 2022. The Commission currently
assumes a full phasing out of energy support measures in 2024. Higher compensation of public
employees, decreasing VAT rates in some food and leisure sectors, and the family package
including a tax bonus and increased child allowances, introducing a parental bonus under the
pension reform, as well as re-introducing free lunches for pupils, are expected to increase the
budget deficit. Deficit developments in 2023 are also affected by the assumed complete phasing
out of COVID-19 emergency temporary measures, which are estimated to have amounted to 0.8%
of GDP in 2022
The tax revenue is growing on the back of strong nominal economic growth, despite some revenue
measures, such as the permanent VAT rate reduction on selected sectors, are reducing revenue. In
2024, the general government deficit is expected to decrease to 4.8% of GDP as inflationary
pressures ease and energy-price related measures are withdrawn.
After decreasing to 57.8% in 2022, the government debt-to-GDP ratio is projected to increase to
58.3% in 2023 and to 58.7% in 2024. This increase is driven by high deficits in 2023 and 2024,
although the strong growth of nominal GDP is expected to partially offset the increases in deficits.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
100.3 100.0 4.0 2.5 -3.3 4.9 1.7 1.7 2.1
57.0 56.8 3.0 2.7 -1.1 2.6 5.5 0.6 0.8
21.2 21.1 2.4 4.5 -0.6 4.2 -4.3 2.9 1.3
19.3 19.2 2.9 6.7 -10.9 3.5 5.9 9.0 3.7
92.7 92.4 8.6 0.8 -6.3 10.9 2.3 3.2 6.1
92.7 92.4 7.0 2.2 -8.1 12.1 4.0 3.9 5.2
99.1 98.8 3.9 1.6 -1.8 4.5 1.2 2.0 2.2
2.8 3.8 -3.1 3.0 3.4 2.8 1.5
0.1 0.0 -1.9 2.6 -0.1 -0.1 0.0
1.1 -1.3 1.6 -0.8 -1.6 -0.9 0.6
1.1 1.0 -1.9 -0.6 1.8 0.6 0.1
Unemployment rate (a)
12.7 5.7 6.7 6.8 6.1 5.8 5.4
5.1 6.8 3.9 6.9 6.0 9.7 7.4
2.1 5.3 5.4 1.3 6.2 8.4 5.3
7.5 9.6 11.4 10.9 5.2 5.9 6.5
1.6 2.5 2.4 2.4 7.5 9.8 5.7
2.6 2.8 2.0 2.8 12.1 10.9 5.7
-0.8 -0.3 -0.4 -1.1 -4.4 1.3 0.7
0.3 -0.6 0.9 -0.4 -5.8 -5.1 -3.8
-2.3 -2.9 0.1 -2.4 -7.8 -6.7 -5.3
-3.4 -1.2 -5.4 -5.4 -2.0 -6.1 -4.8
-2.0 -2.0 -4.3 -5.5 -2.0 -5.8 -4.5
43.4 48.0 58.9 61.0 57.8 58.3 58.7
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.19.1:
Main features of country forecast - SLOVAKIA
2021
Annual percentage change
GDP
20. FINLAND
108
-8
-6
-4
-2
0
2
4
6
15 16 17 18 19 20 21 22 23 24
Graph II.20.1: Finland - Real GDP growth and
contributions
Net exports Investment
Priv. consumption Gov. consumption
Inventories Real GDP (y-o-y%)
forecast
pps.
Growth expected to be muted in 2023 and resume in 2024
In 2022, real GDP grew by 2.1%, driven by private
and public consumption and a notable build-up of
inventories. Private consumption was mainly
boosted by increased demand for services after
the COVID-19 restrictions were lifted. Gross fixed
capital formation, especially construction and R&D
related investments, also contributed positively to
growth. Imports remained elevated throughout
2022, while export growth was much weaker, with
export of services remaining below the level of
2019. Overall, the contribution of net exports to
growth was negative. High inflation, tighter
financing conditions and a deteriorating external
environment negatively impacted economic performance in the second half of 2022. The economy
experienced a mild technical recession, with real GDP growth being negative in the third and fourth
quarters of 2022.
The start of 2023 has been marked by persistently weak business and consumer confidence.
Tighter financing conditions and high inflation are set to continue weighing on consumption,
putting its real growth close to zero in 2023. With construction losing steam after a strong
performance in 2022, growth of gross fixed capital formation is projected to be slightly negative in
2023. Nonetheless, overall economic performance is set to be supported by a positive contribution
from net exports. Economic growth is projected to gradually pick up later in the year with real GDP
growth forecasted slightly above 0% for 2023. For 2024, abating inflation and a more positive
external environment is set to boost real GDP growth to 1.4%.
The labour market remains tight
In 2022, the unemployment rate stood at 6.8%, very close to the pre-pandemic level, and by
February 2023 it declined to 6.6%. In addition, the number of vacancies, although having declined,
remains elevated compared to historical standards. Both indicators confirm the labour market
erformance.
Hence, the unemployment rate is projected to increase only slightly in 2023 to 7.1% before
declining to 6.8% in 2024. At the same time, negotiated wage growth for 2023 will hardly
compensate for the lost purchasing power due to the erosion by inflation in 2022. In 2024,
recovery of real consumption growth.
After experiencing a mild technical recession in the second half of 2022, economic growth in
Finland is expected to remain weak through the first half of 2023. Real GDP growth is projected
to gradually pick up later in the year to reach 0.2% in 2023, before increasing to 1.4% in 2024.
Inflation is set to decelerate from 7.2% in 2022 to 4.8% in 2023 before falling close to 2% in
2024. The general government deficit is forecast to widen in 2023 to some 2.6% of GDP and
remain at a similar level in 2024, leading to an increase of the debt-to-GDP ratio to around 76%
in 2024.
Euro Area Member States, Finland
109
Inflation remains elevated
In 2022, HICP inflation reached 7.2%, with energy and food prices being the main drivers. After
reaching the peak in the last quarter of 2022, HICP inflation decelerated to 7.5% at the beginning
of 2023. Though energy prices seem to be on a declining trend, HICP inflation will remain elevated
at 4.8% in 2023 before it declines to 2.1% in 2024.
Public finances continue to be under pressure
In 2022, the general government deficit declined to 0.9% of GDP on the back of increased revenue
performance due to higher-than-expected inflation, increased accrual of social security
contributions and the gradual removal of COVID-19-related measures, which are estimated to
have amounted to 0.2% of GDP in 2022. In addition, some of the originally planned expenditures
(appropriations) for 2022 were deferred to the coming years, including some in the field of
defence and preparedness-related measures.
The general government deficit is forecast to reach 2.6% of GDP in 2023 and remain at that level
government announced additional spending on defence of 0.3% of GDP in 2023 and 0.2% in 2024.
In addition, the Commission Spring 2023 Forecast takes into account the net budgetary cost of the
energy support measures, projected at 0.3% of GDP in 2023, compared with 0.1% in 2022. The
Commission currently assumes a full phasing out of energy support measures by the end of 2023.
Additional spending is also foreseen from the costs of providing temporary protection to people
fleeing Ukraine, the indexation of social benefits, central government funding to local authorities,
higher interest expenses and R&D-related investments over the forecast horizon. Deficit
developments in 2023 are also affected by the assumed complete phasing out of COVID-19
emergency temporary measures. In 2023, inflation is projected to have a notable impact on
expenditure before moderating in 2024. At the same time, tax revenue growth is expected to slow
down and stabilise in 2024.
In 2022, the debt-to-GDP ratio stood at 73.0%, pointing to the resumption of a growing trend. The
general government debt-to-GDP ratio is forecast at 73.9% in 2023 and 76.2% in 2024, due to a
higher primary deficit.
bn EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
250.6 100.0 1.3 1.2 -2.4 3.0 2.1 0.2 1.4
128.4 51.2 1.9 0.7 -3.8 3.6 2.1 0.1 1.2
61.7 24.6 1.0 2.0 1.2 3.9 2.9 1.3 0.2
59.1 23.6 1.6 -1.5 -1.0 0.9 5.0 -0.1 0.4
99.1 39.6 2.3 6.7 -7.8 6.0 1.7 1.6 3.6
98.9 39.5 3.5 2.4 -6.2 6.0 7.5 -1.3 2.2
254.5 101.6 1.3 1.3 -1.2 2.9 0.4 0.2 1.4
1.6 0.5 -1.9 3.0 3.0 0.3 0.8
0.1 -0.9 0.2 0.0 1.9 -1.5 0.0
-0.3 1.6 -0.7 0.0 -2.3 1.3 0.6
0.7 1.8 -1.9 2.7 2.5 -0.2 0.4
Unemployment rate (a)
8.3 6.8 7.7 7.7 6.8 7.1 6.8
2.2 1.2 0.4 3.6 3.2 4.5 3.8
1.5 1.9 0.9 3.3 3.6 4.1 2.7
7.7 8.5 12.7 10.7 6.6 6.7 6.8
1.5 1.5 1.6 2.2 4.2 4.4 2.4
1.5 1.1 0.4 2.1 7.2 4.8 2.1
-0.7 -0.6 2.3 0.1 -0.6 1.2 0.1
3.9 1.0 1.2 0.9 -0.5 0.7 1.2
1.0 -0.3 0.6 0.5 -3.9 -1.9 -1.2
0.1 -0.9 -5.6 -2.8 -0.9 -2.6 -2.6
-1.0 -1.3 -3.9 -2.3 -0.6 -1.8 -1.9
49.3 64.9 74.7 72.6 73.0 73.9 76.2
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Note : Contributions to GDP growth may not add up due to statistical discrepancies.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.20.1:
Main features of country forecast - FINLAND
2021
Annual percentage change
GDP
Non-EA Member States
21. BULGARIA
112
Moderation of domestic and foreign demand ahead
Real GDP grew by 3.4% in 2022 on account of strong private consumption and exports. Real
household consumption growth accelerated in the second half of 2022, supported by expansion in
disposable income in the context of a very tight labour market. Export growth was particularly
strong in the first half of 2022, reflecting both higher prices and volumes of exported commodities
to the region, notably electricity. Imports also grew strongly, driven by high domestic demand and
the high import content of exports. Early signs of cooling-off of the real estate sector were
registered in the fourth quarter with a slump in building permits and new transactions.
GDP growth is forecast to slow down to 1.5% in
2023 and increase to 2.4% in 2024. Quarterly
GDP is expected to stagnate after 2023-Q1 and
then resume robust expansion in 2024, driven by
export, private consumption and public
investment. The growth rate of exports is set to
decelerate markedly in 2023 and then rebound in
2024. Apart from the softening of external
demand, export performance will be affected by
the planned maintenances in the steel industry
and in the nuclear power plant, as well as by the
products processed from Russian crude oil.
Private consumption is expected to remain strong at the beginning of 2023, to soften until mid-
2024 and to recover thereafter. Over the forecast horizon real household income growth is set to
stay close to the positive 2022 levels, with wage and price inflation moderating broadly in parallel.
Household saving rates are projected to increase with the rise in nominal and real interest rates,
combined with some moderation in lending to households. Investment is expected to be supported
by EU funds, including the ones under the Recovery and Resilience Plan (RRP), although delays
point towards a rather backloaded implementation.
Risks to the forecast are broadly balanced. On the upside, the rapid expansion of nominal
household income and consumption increase the risk of overheating. On the downside, a stronger
fall in external demand, a more direct pass-through of higher interest rates to the domestic market
and a deterioration in the housing market may depress economic activity.
Labour market remains tight with prospects for a gradual wage moderation
The labour market remains tight, with unemployment rate at 3.8% in February 2023. In 2022,
nominal wages continued to increase strongly, reflecting both labour shortages and pressures from
high inflation. In manufacturing, wage hikes were in line with strong productivity gains, while in
construction and services they led to a rapid increase in unit labour costs. Wage growth is set to
come down gradually, initially in the tradable sector, following the weaker export performance and
the lower inflation rate. Wage moderation is then expected to spread to the rest of the economy.
Employment is forecast to grow only marginally in 2023 and 2024 since the pool of unemployed
has decreased substantially over the past years and the labour force has been shrinking overall.
Economic expansion is expected to slow down in 2023 before picking up in 2024. Export growth is
set to slow down in 2023, due to subdued foreign demand and country-specific one-off factors.
Household consumption growth is forecast to decrease towards the end of 2023 and the first half
of 2024, as real interest rates pick up and wage growth moderates. Inflation is set to decelerate,
but to remain relatively high in 2023. The government deficit is forecast to increase in 2023
driven by social and income policies adopted in 2022. The 2023 budget discussion is ongoing.
-6
-4
-2
0
2
4
6
8
10
15 16 17 18 19 20 21 22 23 24
Graph II.21.1: Bulgaria - Real GDP growth and
contributions
Net exports Investment
Priv. consumption Gov. consumption
Inventories Real GDP (y-o-y%)
forecast
pps.
Non-EA Member States, Bulgaria
113
Inflation to decelerate gradually
HICP inflation averaged 13% in 2022. Energy and food prices clearly drove inflation in the first
half of the year and led to higher inflation in transport and catering services. In the second half of
the year, consumer price inflation in services, also beyond those strongly influenced by food and
energy prices, started to pick up, while food prices continued to increase, albeit at a lower monthly
rate. Annual HICP inflation is set to come down from 13% in 2022 to 9.4% in 2023 and then
decelerate further to 4.2% in 2024. Energy prices are expected to decline in both 2023 and 2024,
while food price inflation is forecast to persist at high levels in 2023 and abate in 2024. Services
price inflation is, however, projected to accelerate in 2023 and remain relatively high in 2024.
Government deficit is set to slowly decrease
Following a year of significant fiscal consolidation and a deficit of 2.8% of GDP in 2022, the 2023
deficit is projected to rise again to 4.8% of GDP in 2023. By the cut-off date of this forecast the
government and the Parliament had not adopted any consolidation measures to finance the
increases in wages and pensions that have a budgetary cost of around 3.5% of GDP in 2023.
However, several factors should help contain the deficit. The net budgetary cost of the energy
support measures is projected at 0.8% of GDP in 2023, compared with 1.5% in 2022. These
measures are set to fully phase out in 2024. Transfers related to people fleeing Ukraine are also
projected to have a significantly lower impact on the budget. The tax revenue is set to benefit from
tax-rich income increases, but also from higher consumption and rising prices of goods and
services subject to indirect taxes, mainly VAT. Deficit developments in 2023 are also affected by
the assumed complete phasing out of COVID-19 emergency temporary measures, which are
estimated to have amounted to 1% of GDP in 2022. Public investment is expected to peak in 2023
on account of the completion of projects financed by the European Structural and Investment
Funds (ESIF) 2014-2020.
The general government deficit is forecast to remain at 4.8% of GDP in 2024. Under the no-policy-
change assumption, tax revenue increases are set to slow down. Current expenditure is forecast to
grow faster than revenue, but the impact on the deficit will be offset by lower nationally financed
public investment. The implementation of the RRP is set to pick up instead. General government
debt is forecast to increase from 22.9% of GDP in 2022 to 28.1% by 2024. There is a positive risk
that general government deficit and debt turn out lower than projected as the main parliamentary
parties have committed to adopt consolidation measures to lower deficit in 2023.
bn BGN
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
139.0 100.0 3.2 4.0 -4.0 7.6 3.4 1.5 2.4
81.0 58.3 3.6 6.0 -0.6 8.8 4.8 3.6 1.5
26.3 18.9 1.9 2.0 8.3 0.4 6.5 3.9 4.0
22.7 16.3 3.8 4.5 0.6 -8.3 -4.3 2.2 3.3
85.3 61.3 7.2 4.0 -10.4 11.0 8.3 2.6 3.2
82.9 59.6 7.3 5.2 -4.3 10.9 10.5 2.9 2.8
132.5 95.3 2.7 4.6 -3.2 6.3 5.4 0.2 2.4
3.7 4.7 1.2 3.6 3.3 3.2 2.2
0.1 0.0 -1.1 3.8 1.3 -1.5 0.0
-0.6 -0.7 -4.0 0.2 -1.2 -0.2 0.3
0.6 0.3 -2.3 0.2 1.3 0.3 0.3
Unemployment rate (a)
10.6 5.2 6.1 5.3 4.3 4.3 4.0
8.3 6.9 7.2 11.3 18.4 13.5 9.1
5.6 3.1 9.0 3.6 16.0 12.2 6.8
-3.4 : : : : : :
4.3 5.2 4.3 7.1 15.1 10.4 3.9
3.2 2.5 1.2 2.8 13.0 9.4 4.2
1.9 1.9 4.3 0.6 1.0 2.0 0.0
-12.5 -4.7 -3.1 -4.1 -5.4 -4.2 -4.0
-4.9 1.9 0.0 -1.9 -0.4 0.1 0.2
-0.5 2.1 -3.8 -3.9 -2.8 -4.8 -4.8
0.2 1.7 -2.4 -4.0 -3.2 -5.0 -5.0
22.7 20.0 24.5 23.9 22.9 25.0 28.1
Private Consumption
Table II.21.1:
Main features of country forecast - BULGARIA
2021
Annual percentage change
GDP
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Terms of trade goods
Domestic demand
Inventories
Net exports
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Note : Contributions to GDP growth may not add up due to statistical discrepancies.
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
22. CZECHIA
114
Economy to weaken on its way to recovery
2022, driven
by investment and increased inventories, while
dampened by weak household consumption amid
lower consumer confidence and the tighter
financial situation of Czech households. Economic
activity is expected to remain subdued over the
first half of 2023, with real GDP growth in the
first quarter estimated at 0.1% q-o-q, mainly on
the back of foreign demand amid low domestic
consumption. Annual GDP growth is forecast to
slow to 0.2% in 2023, and to recover to 2.6% in
2024, reaching pre-pandemic output levels at the end of 2023.
Despite several fiscal stimulus measures, household consumption declined for five consecutive
quarters until the end of 2022 and is expected to remain subdued also in 2023. Declining real
disposable income and tightening financing conditions are the key factors. Household consumption
is forecast to start increasing during 2023. In line with developments in real income, household
consumption is projected to become the main driver of real GDP growth in 2024 together with
foreign demand.
Investment activity picked up significantly in 2022 and is expected to remain the key growth driver
in 2023, significantly supported by EU structural and RRF funds. At the same time, the tight
financial conditions and persistent labour shortages are expected to weigh on business investment
growth over the forecast horizon. The easing of supply chain problems is set to have a positive
impact on exports, which are projected to increase in 2023 and 2024. Weaker domestic demand is
set to hold back imports in 2023. While imports are expected to rebound in 2024, a positive
contribution of net exports to GDP growth is forecast over the forecast horizon.
This outlook is subject to high uncertainty, most notably, in relation to the risks of further
disruptions of energy markets given the energy intensity of the Czech economy.
Labour market to remain robust
Labour demand remained resilient to the economic slowdown in recent quarters and the
unemployment rate declined to 2.2% in 2022. It is forecast to remain low in 2023, around 2.8%,
and to decline to 2.6% in 2024. Shortages of skilled workers are set to persist. Despite the tight
labour market, real wages are still projected to decline in 2023, as nominal wage growth lags
behind inflation. Real wages are expected to increase by 3.2% in 2024 amidst recovering economic
activity.
Inflation to decline as from summer 2023
Headline inflation appears to have peaked at 18% in 2023-Q1, following the phase-out of the
savings tariff on energy prices, which was not fully offset by a cap on electricity and gas prices
introduced by the Czech government. Energy prices are expected to decline in 2023-Q2 and remain
stable afterwards. The inflation rate is set to decrease, driven mainly by base effects, accompanied
by lower commodity prices, recent currency appreciation and weak consumer demand. The annual
Following moderate economic activity in 2022, real GDP growth in Czechia is forecast to
decelerate to 0.2% in 2023, due to elevated price pressures amid tight domestic financial
conditions. The inflation rate is set to remain close to 12% in 2023 but to decline to 3.4% in
2024. The general government deficit is still affected by energy support measures in 2023, but it
is forecast to decline to 3% in 2024.
-8
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.22.1: Czechia - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Non-EA Member States, Czechia
115
average inflation rate is projected to decelerate from 14.6% in 2022 to 11.9% in 2023 and to then
drop further to 3.4% in 2024 on the back of a decrease in energy costs and related spill-over
effects. This forecast assumes that the price cap on energy is phased out in December 2023. The
economic outlook remains sensitive to energy commodity prices and financing conditions.
Fiscal consolidation is beginning
The Czech budget deficit decreased to 3.6% of GDP in 2022 on the back of expenditures
contracting in real terms as the COVID-19 related programmes were withdrawn and the new
energy-related support measures had a lower cost than initially anticipated.
The budget deficit is forecast to remain unchanged at 3.6% of GDP in 2023. Several energy
support measures, including price caps on energy prices or support for vulnerable consumers, have
been put in place to help households and the industry faced with raising energy prices. These are
high property income revenues. The net budgetary cost of the energy support measures is
projected in the Commission 2023 spring forecast at 1.3% of GDP in 2023, compared with 0.7% in
2022. The Commission currently assumes the net cost of energy support measures at 0% of GDP
in 2024. The forecast also incorporates a reduced indexation of pensions for this year (as already
expected to decrease in 2024 to 3.0% as energy support measures are assumed to be withdrawn.
programme of at least 1 pp. of GDP discussed by the government could reduce the deficit in 2024.
As the remaining structural funds from the previous programming period are still being drawn this
year together with those from the new programming period and RRF funds, public investment is
set to grow strongly in 2023 before dropping to its historical average in 2024.
While the public debt-to-GDP ratio is still low compared to other EU Member States, the pace of its
growth in 2020-22 was above the EU average (from 30% in 2019 to 44% in 2022). On the back
of high nominal GDP growth and a decreasing public deficit, the public debt-to-GDP ratio is
expected to decrease slightly and stabilise at 43.1% in 2023 and 43.4% in 2024.
bn CZK
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
6108.7 100.0 2.9 3.0 -5.5 3.6 2.5 0.2 2.6
2771.7 45.4 2.5 2.7 -7.2 4.1 -0.9 -2.2 3.3
1310.2 21.4 1.2 2.5 4.2 1.4 0.6 1.7 1.5
1588.8 26.0 2.7 5.9 -6.0 0.8 6.2 2.8 2.7
4442.8 72.7 8.1 1.5 -8.0 6.9 5.7 5.1 4.4
4261.9 69.8 7.2 1.5 -8.2 13.3 5.7 4.5 4.2
5858.9 95.9 2.8 2.4 -4.4 4.5 2.2 0.3 2.9
2.2 3.3 -4.2 2.4 1.3 0.1 2.5
0.0 -0.3 -0.9 4.8 1.0 -0.3 -0.2
0.7 0.0 -0.4 -3.6 0.2 0.4 0.2
0.7 0.2 -1.7 0.4 1.7 0.7 0.6
Unemployment rate (a)
6.0 2.0 2.6 2.8 2.2 2.8 2.6
4.3 7.2 3.1 5.0 5.5 7.3 6.6
2.0 4.3 7.3 1.8 4.8 7.8 4.4
11.9 13.1 19.2 19.2 17.0 16.5 15.3
1.5 3.9 4.3 3.3 8.6 11.3 5.5
1.9 2.6 3.3 3.3 14.8 11.9 3.4
-0.3 0.4 1.8 -0.2 -5.2 3.4 1.9
1.8 4.1 4.9 1.2 -1.5 1.0 2.3
-2.9 -0.9 0.7 -2.3 -5.4 -2.5 -0.7
-2.1 0.3 -5.8 -5.1 -3.6 -3.6 -3.0
0.0 -0.8 -4.1 -4.5 -3.2 -2.7 -2.4
34.4 30.0 37.7 42.0 44.1 42.9 43.1
Private Consumption
Table II.22.1:
Main features of country forecast - CZECHIA
2021
Annual percentage change
GDP
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Terms of trade goods
Domestic demand
Inventories
Net exports
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Harmonised index of consumer prices
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
General government gross debt (c)
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
23. DENMARK
116
Economic expansion hit by high inflation
during 2021, net exports and the build-up of inventories. Private consumption was negatively
affected by the surge in consumer prices and falling real disposable household income.
Consumption stabilised in late 2022 after inflation reached its peak. Construction investment grew
in response to rising house prices and housing demand in early 2022, but momentum waned
towards the end of the year. Higher interest rates, elevated energy costs and diminishing
expectations of future demand weighed on equipment investment. For the whole of 2022,
investment increased substantially thanks to the purchase of a patent in late 2022, which is also
reflected in services imports. Net exports were the main contribution to growth in 2022, driven by
strong exports from the pharmaceutical industry and maritime transport sector.
In 2023, following a weak expected beginning of
the year, real GDP growth is expected to improve
gradually. Private consumption is set to recover as
inflation decelerates, consumer confidence
improves and households start to recoup some of
the losses in income thanks to wage increases
negotiated at the beginning of the year.
Investment is likely to remain subdued as house
prices continue to fall and financial conditions
tighten. The exceptional patent-driven increase in
intangible investment in the last quarter of 2022
is expected to be fully reversed in early 2023. Net
exports are still forecast to contribute positively to
growth, driven by goods exports.
In 2024, the economy is expected to continue expanding. Consumption is set to keep increasing as
worked are expected to increase. Investment is projected to benefit from the expected pick-up in
domestic and international demand while interest rates may peak soon. Net exports could provide
a positive contribution to growth. The gradual reopening of the Tyra gas field is expected to
contribute positively to net energy exports. Imports are projected to increase due to the
Overall, real GDP is forecast to grow by 0.3% in 2023 and 1.5% in 2024.
Turnaround in the labour market
In 2022, the labour market was very tight, with employment increasing strongly, while
unemployment decreased. The start of 2023 brought signs that the labour market tightness is
easing, with less businesses reporting labour shortages, a lower job vacancy rate, and an uptick in
the unemployment rate since late 2022. The cooling down of the labour market is projected to be
accompanied by an increase in the unemployment rate from 4.5% in 2022 to 5.0% in 2023 and
5.1% in 2024.
Following strong growth in 2022, economic activity is projected to decelerate in the first quarters
of 2023 before gradually picking up pace again over the remainder of the forecast horizon.
Growth is set to be supported by solid net exports and an improvement in private consumption as
inflation pressures recede and households recover some losses in real disposable income. The
labour market is likely to cool slightly in 2023 as employment is projected to decline and the
unemployment rate to rise slightly. Denmark is forecast to maintain a sizeable government
budget surplus over the forecast horizon.
-6
-4
-2
0
2
4
6
15 16 17 18 19 20 21 22 23 24
Graph II.23.1: Denmark - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Non-EA Member States, Denmark
117
Strong imported inflation
Consumer prices have been on a strong upward path in 2022, when inflation reached 8.5%. Prices
of imported goods, notably energy, raw materials and food were the main drivers of inflation. HICP
inflation appears to have peaked in autumn 2022 and has gradually abated since. It is set to
further decline over the forecast horizon. Energy inflation has dropped sharply and is forecast to
turn negative as of mid-2023, contributing to a deceleration of headline inflation. In turn, core
inflation is expected to grow faster than headline inflation both in 2023 and 2024 in line with
negotiated wage increases and lagged adjustment of prices to higher costs. HICP inflation is
forecast to fall to 4.3% in 2023 and 2.5% in 2024.
Government budget surplus set to continue
In 2022, the general government budget surplus remained high, at 3.3% of GDP. This was
supported by stronger-than-expected revenues from business and personal income tax on the back
of positive employment developments and healthy corporate earnings.
The general government budget surplus is expected to decline to 2.3% in 2023 and 1.3% in 2024.
Revenue is projected to continue to grow in 2023 and 2024, reflecting the gradual improvement in
economic conditions. However, growth in expenditure particularly for the public sector wage bill
is expected to lead to a further reduction in the budget surplus. The net budgetary cost of the
energy support measures is projected in the Commission 2023 spring forecast at 0.3% of GDP in
2023, compared with 0.1% in 2022. The Commission currently assumes full phasing out of energy
support measures in 2024.
In 2022, the government debt-to-GDP ratio fell to 30.1%. The continued government surplus and
denominator effects, countered by sizeable stock-flow adjustment items, are expected to bring the
debt-to-GDP ratio slightly further down to 28.8% in 2024.
bn DKK
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
2504.2 100.0 1.3 1.5 -2.0 4.9 3.8 0.3 1.5
1141.9 45.6 1.5 1.6 -1.4 4.2 -2.3 0.1 1.3
608.4 24.3 1.2 0.8 -1.4 4.2 -3.5 -0.1 1.1
566.1 22.6 2.1 -1.3 5.1 6.2 8.6 -3.5 -0.3
1494.0 59.7 3.0 4.5 -6.3 8.0 8.6 1.1 1.4
1315.2 52.5 3.8 3.0 -3.6 8.0 4.2 -1.0 0.6
2590.8 103.5 1.6 1.6 -1.7 5.1 4.2 0.3 1.4
1.5 0.7 0.1 4.3 0.1 -0.8 0.8
0.0 -0.2 -0.2 0.0 0.8 -0.2 0.2
-0.1 1.0 -1.9 0.5 2.9 1.3 0.6
0.4 1.4 -1.1 2.4 3.9 -0.3 -0.2
Unemployment rate (a)
5.9 5.0 5.6 5.1 4.5 5.0 5.1
2.5 1.9 2.6 2.9 2.9 4.9 5.3
1.6 1.9 3.5 0.6 3.0 4.2 3.5
7.7 10.2 11.7 9.3 14.0 13.5 14.4
1.6 1.0 2.6 2.8 7.6 0.2 2.1
1.4 0.7 0.3 1.9 8.5 4.3 2.5
0.6 -0.5 1.7 -5.2 -9.6 4.6 -0.2
3.9 5.0 5.3 4.0 3.3 7.1 7.4
5.6 8.5 7.9 9.0 13.1 10.7 10.7
0.6 4.1 0.2 3.6 3.3 2.3 1.3
0.4 4.5 2.6 4.4 3.1 3.5 2.1
39.3 33.7 42.2 36.7 30.1 30.1 28.8
Private Consumption
Table II.23.1:
Main features of country forecast - DENMARK
2021
Annual percentage change
GDP
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Terms of trade goods
Domestic demand
Inventories
Net exports
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
24. HUNGARY
118
From recession to gradual recovery
energy prices and monetary tightening took hold. Investment fell, while consumption and export
growth also slowed down. Real GDP contracted by 0.4% q-o-q in 2022-Q4, and monthly indicators
point to a further drop in 2023-Q1.
Annual GDP growth is forecast to slow down from
4.6% in 2022 to 0.5% in 2023, and then pick up to
2.8% in 2024 supported by lower energy
commodity prices and an expected disinflation.
Consumption is projected to decline in 2023 but
return to growth in 2024, driven by developments
in real income. Investment is set to remain muted
throughout the forecast horizon due to low
demand, tight financing conditions and fiscal
consolidation efforts. Exports are projected to slow
down in 2023 but pick up in 2024, in line with
external demand, and supported by ongoing FDI
projects. On the other hand, weaker domestic demand is set to hold back imports throughout the
forecast horizon, ensuring a positive contribution of net exports to GDP growth. The agricultural
sector contributed negatively to growth by 1.1% of GDP in 2022 due to severe droughts, but the
recovery of crop yields is set to boost GDP this year, mainly through inventory accumulation.
Higher energy prices worsened the current account balance to -8.2% of GDP in 2022. The recent
fall of commodity prices and the moderation of import demand are expected to reverse this
development, and the current account is projected to improve to -2.8% by 2024.
The labour market remains tight
Labour demand remained resilient during the economic slowdown of recent quarters and the
unemployment rate rose only modestly to 4.1% in 2023-Q1. It is projected to rise to 4.2% on
average in 2023, to then fall back to 4.0% in 2024. Shortages of skilled workers are expected to
persist, exacerbated by population ageing. Nominal wage growth is set to remain robust, in line
with limited labour market slack and high inflation. For 2023, wage growth is also boosted by a
16% minimum wage hike. Real wages are currently declining due to high inflation, but they are
expected to rise again as from autumn 2023.
Inflation is expected to fall sharply in 2024
HICP inflation appears to have peaked at 25.9% in 2023-Q1, following the phase-out of the motor
fuel price cap in December 2022. The inflation rate is set to ease in the subsequent quarters,
driven by base effects, lower commodity prices, the recent currency appreciation and weak
consumer demand. The annual average inflation rate is projected to increase from 15.3% in 2022
to 16.4% in 2023, and then drop to 4.0% in 2024. The forecast assumes that the price cap on
certain basic food items is not extended again beyond June 2023, and that residential utility prices
remain unchanged.
economy was exposed to higher commodity prices, weaker external demand and tighter financing
conditions. Lower energy prices and an expected disinflation are set to trigger a gradual recovery
as from the second half of 2023. The budget deficit is projected to remain elevated, reflecting
high expenditure levels and the impact of lasting revenue-decreasing measures adopted in recent
years.
-8
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.24.1: Hungary - Real GDP growth and
contributions
Net exports Investment
Priv. consumption Gov. consumption
Inventories Real GDP (y-o-y%)
forecast
pps.
Non-EA Member States, Hungary
119
Downside risks to the growth outlook stem from a sudden increase in the country risk premium
which might also constrain fiscal policy, and from the exposure of the economy to a potential spike
in energy prices. Upside risks to inflation are related to a potentially looser fiscal policy stance,
high wage growth in a tight labour market, and the de-anchoring of inflation expectations.
Persistently high budget deficits
The government deficit remained high at 6.2% of GDP in 2022, driven by pressures related to the
energy crisis and expansionary policies adopted in the aftermath of the pandemic. In 2023, the
deficit is projected to decrease to 4.0% supported by temporary sectoral and windfall profit taxes
(reaching 1.5% of GDP in 2023), as well as by robust revenue growth fuelled by high inflation.
Subsidies to utility companies to cover their losses on regulated energy prices are boosting current
expenditures in 2023. The recent fall in gas prices is expected to lead to a reduction of these
subsidies in the next heating season, mitigating their fiscal burden in 2024. The net budgetary cost
of the energy support measures is projected in the Commission 2023 spring forecast at 1.2% of
GDP in 2023, compared with 1.0% in 2022. The Commission currently assumes the net cost of
energy support measures at 0.4% of GDP in 2024.
Despite the lower projected cost of energy measures and the improving macroeconomic outlook,
the deficit is projected to remain high in 2024 at 4.4% of GDP. The revenue growth is expected to
be hampered by the assumed phaseout of temporary taxes in line with their sunset clauses.
Expenditure is set to remain elevated due to the rising debt-servicing costs and lingering spending
pressures stemming from high inflation. Nationally financed public investment is assumed to
remain at a level that covers the amortisation of the public capital stock. The Convergence
Programme projects further cutbacks in nationally financed investment, which could result in a
lower deficit. Upside risks to the deficit stem from the pressures on public sector wages, higher
debt financing costs, and energy commodity prices.
Owing to high inflation and robust GDP growth, the debt-to-GDP ratio fell by 3.3 pps. to 73.3% in
2022. It is projected to decrease further to 70.7% in 2023, before rising again to 71.1% in 2024
due to a high deficit and slower nominal GDP growth.
bn HUF
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
55255.1 100.0 2.2 4.9 -4.5 7.2 4.6 0.5 2.8
26657.5 48.2 1.6 5.0 -1.2 4.6 6.4 -0.7 2.8
11514.6 20.8 1.5 5.9 -0.5 1.7 0.8 0.0 0.9
15138.6 27.4 2.7 12.8 -7.1 6.5 1.2 -2.9 1.5
44344.0 80.3 7.3 5.4 -6.1 8.8 11.8 3.5 4.5
44174.5 79.9 6.4 8.2 -3.9 7.7 11.1 2.0 3.5
53568.8 96.9 2.3 6.3 -4.3 6.5 4.6 0.3 2.5
1.8 6.8 -2.6 4.4 3.6 -1.2 2.0
-0.2 0.1 0.0 1.8 0.3 0.4 0.0
0.7 -2.0 -2.0 1.0 0.7 1.3 0.8
0.8 1.1 -1.1 1.1 1.7 0.0 0.5
Unemployment rate (a)
7.4 3.3 4.1 4.1 3.6 4.2 4.0
4.5 7.0 3.0 8.8 15.0 14.6 8.3
3.1 3.1 6.7 2.6 11.9 14.0 5.8
11.3 14.7 15.4 17.5 13.0 12.9 13.4
3.6 4.8 6.4 6.4 15.3 13.0 3.5
3.6 3.4 3.4 5.2 15.3 16.4 4.0
-0.4 0.5 2.0 -3.7 -6.6 4.3 0.0
0.1 -2.5 -1.0 -2.9 -8.8 -3.8 -3.2
-2.7 -0.9 -0.9 -3.8 -8.3 -3.5 -2.8
-4.4 -2.0 -7.5 -7.1 -6.2 -4.0 -4.4
-2.8 -3.7 -5.8 -6.7 -6.4 -3.2 -3.8
71.3 65.3 79.3 76.6 73.3 70.7 71.1
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.24.1:
Main features of country forecast - HUNGARY
2021
Annual percentage change
GDP
25. POLAND
120
Growth to decelerate after strong 2022
The Polish economy showed upbeat economic growth in 2022, primarily driven by a surge in
private consumption and inventories. However, elevated inflation, tightened financing conditions,
and low consumer and business confidence negatively impacted economic activity towards the end
of the year, resulting in a substantial quarter-on-quarter GDP decline of 2.4% in 2022-Q4.
These downside factors are set to continue
weighing on GDP growth over the forecast
horizon. Private consumption is expected to
decrease moderately in 2023, as the boost
provided by the inflow of people fleeing Ukraine
gradually fades and elevated inflation negatively
affects real incomes. The continued rise in interest
rates is also set to dampen private consumption,
given the large share of mortgages with variable
interest rates.
Low confidence, elevated cost pressures
and increasing financing costs will likely
deteriorate the outlook for private investment.
Nevertheless, this is set to be counterbalanced by a rise in public defence spending and local
government investments. Soaring prices and supply-chain disruptions throughout 2021 and 2022
led to an unprecedented accumulation of inventories, which is expected to reverse in 2023-24 and
put significant downward pressure on growth.
The easing of supply bottlenecks and a marked inflow of foreign direct investment are set to
support export growth, while imports are projected to be negatively impacted by the deceleration
of domestic demand and the reversal of the inventory cycle. As a result, the trade balance is
expected to post a strong positive contribution to GDP growth, especially in 2023.
Overall, real GDP growth is forecast to slow to 0.7% in 2023, before rebounding to 2.7% in 2024
as inflationary pressures gradually subside and financing conditions improve. This forecast is
however subject to high uncertainty with risks mainly tilted to the downside. A more persistent
real incomes. A tightening of financing conditions might constrain fiscal policy, with repercussions
for economic growth.
The unemployment rate to remain stable
Despite the deceleration in economic activity, the unemployment rate is set to remain stable over
the forecast horizon given that acute labour shortages are making firms reluctant to lay-off
workers. Consequently, the unemployment rate is projected to increase only marginally to 3.3% in
2023, before gradually declining again to 3.2% in 2024. Wages are expected to continue growing
at a fast pace, fuelled by the minimum wage increase and low unemployment rate, resulting in
positive real wage growth in both 2023 and 2024.
After a robust performance in 2022, economic growth is expected to decrease markedly as
tightened financing conditions, low external demand, and dampened confidence impact economic
activity. Weakening domestic demand and a decline in commodity prices are set to put downward
pressure on prices, but rising labour costs are projected to keep inflation elevated throughout the
forecast horizon. Public expenditure relative to GDP is forecast to stay high compared to the pre-
pandemic years, preventing rebalancing of the general government budget.
-6
-4
-2
0
2
4
6
8
10
15 16 17 18 19 20 21 22 23 24
Graph II.25.1: Poland - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Non-EA Member States, Poland
121
Inflation to remain elevated after peaking in early-2023
After consistently surprising on the upside throughout 2022, HICP inflation seems to have reached
its peak, falling from 17.2% in February 2023 to 15.2% in March. Energy price inflation is set to
continue its downward path during 2023, supported by strong base effects and declining
commodity prices. Weakening domestic demand and high interest rates are also expected to exert
downward pressure on inflation, particularly on the core inflation component. Nevertheless,
inflation is projected to remain well above the central bank target given robust wage growth and
the lagged pass-through of elevated energy prices into core inflation components. As a result, after
reaching 11.7% in 2023, HICP inflation is forecast to decelerate but remain high at 6.0% in
2024.
Public finances still unbalanced
In 2022, the general government deficit amounted to 3.7% of GDP. The cost of measures related
to the energy crisis and of aid to displaced persons from Ukraine combined with the adverse
impact of the personal income tax reform put pressure on public finances. The fiscal balance was
supported by soaring revenue from corporate income taxes owed to the high profits of companies.
The general government deficit is expected to increase to 5.0% of GDP in 2023. The net budgetary
cost of the energy support measures is projected in the Commission 2023 spring forecast at 1.7%
of GDP in 2023, compared with 1.9% in 2022. The measures include price freeze schemes for
electricity and gas, which are partly funded by mechanisms based on windfall profits of energy
producers. In addition, the high indexation of pensions is set to increase social benefits while public
sector wages and the value of government purchases are expected to grow on the back of high
inflation. The government has also decided to raise spending on healthcare and on defence. The
extraordinary aid granted to farmers is set to further increase the deficit in 2023. Deficit
developments in 2023 are also affected by the assumed complete phasing out of COVID-19
emergency temporary measures, which are estimated to have amounted to 0.7% of GDP in 2022.
In 2024, the general government deficit is forecast to remain above the 3% of GDP reference
value at 3.7% of GDP. The Commission currently assumes the net cost of energy support measures
at 0.3% of GDP in 2024. Other government expenditure, including public investment, is expected to
remain high. Adjustments related to timing of payment and deliveries of military investments are
set to increase the public debt ratio, which is projected to reach 53% of GDP by 2024.
bn PLN
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
2631.3 100.0 4.0 4.5 -2.0 6.9 5.1 0.7 2.7
1478.5 56.2 3.5 3.4 -3.4 6.1 3.3 -0.1 2.7
493.2 18.7 2.8 6.5 4.9 5.0 -2.0 0.5 2.7
442.4 16.8 5.2 6.2 -2.3 1.2 5.0 2.0 3.1
1518.2 57.7 7.5 5.3 -1.1 12.3 6.2 2.3 3.6
1431.0 54.4 7.0 3.2 -2.4 16.1 6.2 0.0 3.1
2508.7 95.3 3.8 4.5 -1.6 6.0 5.3 -0.1 3.7
3.7 4.3 -1.5 4.6 2.3 0.4 2.5
0.3 -1.1 -1.1 3.4 2.6 -1.1 -0.3
0.1 1.2 0.6 -1.1 0.2 1.4 0.5
1.1 0.0 0.0 2.5 0.4 0.1 0.3
Unemployment rate (a)
10.8 3.3 3.2 3.4 2.9 3.3 3.2
4.3 8.6 5.3 4.7 13.2 12.7 8.3
1.3 3.9 7.5 0.4 8.1 12.1 5.8
5.3 4.6 11.3 2.8 1.4 2.8 2.9
2.1 3.0 4.3 5.3 11.3 11.8 5.8
2.0 2.1 3.7 5.2 13.2 11.7 6.0
0.5 1.5 3.2 -2.0 -3.6 3.1 0.6
-2.8 -0.8 1.3 -1.3 -3.7 -0.9 -0.5
-3.6 -0.3 2.3 -1.4 -3.2 -1.0 0.5
-3.9 -0.7 -6.9 -1.8 -3.7 -5.0 -3.7
-1.9 -2.1 -5.7 -2.2 -5.0 -4.5 -2.9
50.3 45.7 57.2 53.6 49.1 50.5 53.0
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.25.1:
Main features of country forecast - POLAND
2021
Annual percentage change
GDP
26. ROMANIA
122
Growth resilience despite headwinds
In 2022 growth reached 4.7% driven by strong private consumption and robust investment. High
frequency indicators point to a rather resilient economy in 2023-Q1, with sentiment and retail
sales turnover increasing and industrial production showing signs of improvement. Employment
expectations remained at a relatively high level.
Going forward, high inflation, tight financing conditions and more muted growth in trading partners
are all set to slow down real growth. Despite these headwinds, private consumption growth is
expected to stay positive on the back of higher wages and pensions, as well as of the extension of
the energy price cap until 2025. Government support schemes and a resilient labour market will
also support economic activity.
Monetary policy is set to remain tight with the
policy rate at 7%, affecting the flow of credit to
the economy and investments. However, planned
investments under the the Recovery and
Resilience Plan (RRP), and inflows of other EU
funds, are set to more than offset the impact of
tight credit conditions. Investments are expected
to strongly support real growth in 2023 and 2024.
Net exports are not projected to contribute to GDP
growth. Despite subsiding energy prices and
improving terms of trade, strong domestic
demand is set to keep the trade balance negative.
The current account deficit is expected to stay
around [8%] of GDP over the forecast horizon, posing external sustainability risks over the medium
term.
Overall, real GDP is projected to grow by 3.2% in 2023 and 3.5% in 2024. Risks to the forecast are
tilted to the downside as delays in the implementation of the RRP could reduce investments.
Sticky unemployment and wage pressures
Despite solid GDP growth, employment prospects remain subdued as an ageing population and
mass migration pose serious headwinds to job creation. However, labour market integration of
people fleeing the war in Ukraine and visas for non-EU workers could act as mitigating factors. The
unemployment rate is expected to decline slightly to 5.4% in 2023 and 5.1% in 2024. Wage
increases have been strong, especially in the private sector, but for the total economy they remain
below headline CPI inflation. The tight labour market, the need to make up for losses in purchasing
power, and high inflation should contribute to strong wage increases in 2023 and 2024.
Core inflation to remain high
Headline HICP inflation peaked in November and then decreased to 12.2% in March, thanks to
lower energy prices. Due to the energy price capping scheme, hardly any change is expected in this
Growth is set to continue, albeit at a slower pace than in 2022 due to persistent inflation, tight
financing conditions and low growth in trading partners. Core inflation is expected to peak in
2023, and headline inflation to remain above the inflation target over the forecast horizon.
Unemployment is projected to only marginally decline, keeping the labor market relatively tight
and wage increases high. The general government deficit is set to fall to 4.4% in 2024, due to
strong revenue growth, helped by tax code changes and robust nominal GDP, and to a decline in
current expenditure as a share of GDP. The debt-to-GDP ratio is forecast to reach 46.1% in 2024.
-8
-6
-4
-2
0
2
4
6
8
10
15 16 17 18 19 20 21 22 23 24
Graph II.26.1: Romania - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Non-EA Member States, Romania
123
component, mostly determined by movements in fuel and energy distribution prices. Core inflation,
however, continued to increase on the back of hikes in processed food and services. It is projected
to stay above headline inflation this year, after having peaked in the first quarter. Overall, average
HICP inflation is set to fall to 9.7% in 2023 and to 4.6% in 2024, but risks are tilted to the upside
as wage increase pressures are high.
The government deficit is projected to decline
Robust nominal GDP growth and strong energy-related taxes are set to boost government
revenues in 2023. Current expenditure is forecast to grow less than nominal GDP, driven by
moderation in public wages. Public investment as a share of GDP is expected to rise, reflecting
ambitious domestic budget targets and large inflows of EU funds. Additional payments to
pensioners, amendment of the fiscal code, the compensation scheme to deal with the surge in
energy prices, and a credibly announced legislation to limit government expenditure in 2023 are all
taken into account in the forecast. The net budgetary cost of the energy support measures is
projected in the Commission 2023 spring forecast at 0.3% of GDP in 2023, compared with 0.4%
in 2022.
The deficit is forecast to fall to around 4.4% of GDP in 2024, as current expenditure decrease as a
share of GDP, due to the discontinuation of some measures implemented in 2022/2023 amounting
to about 0.3 pps. of GDP, and to the effect of automatic stabilisers as nominal economic growth is
expected to still be substantial. Capital expenditure growth is projected to slow due to base effect
created by the large residual amount from the 2014-2020 EU budget cycle expected in 2023. The
Commission currently assumes a full phasing out of energy support measures in 2024
General government debt is projected to decrease to 45.6% of GDP in 2023, due to deficit
reduction and stock-flow adjustment, before increasing to 46.1% in 2024. Risks to the fiscal
outlook are tilted to the downside. Lower GDP growth, upcoming electoral cycle, possible upside
pressures on public wages following negative real growth rates since 2021, indexation of pensions
that in 2024 will incorporate the 2022 high inflation, could result in higher budget deficits.
bn RON
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
1187.4 100.0 3.9 3.9 -3.7 5.8 4.7 3.2 3.5
741.1 62.4 5.8 3.4 -3.9 8.1 5.5 3.8 3.2
210.2 17.7 0.5 7.2 1.1 1.3 4.3 -0.9 3.1
281.9 23.7 5.7 12.6 1.1 1.9 8.0 7.0 8.0
482.7 40.6 10.1 5.4 -9.5 12.6 9.6 4.0 4.8
550.1 46.3 12.0 8.6 -5.2 14.9 9.9 5.1 5.5
1168.8 98.4 3.8 4.3 -3.8 5.8 3.5 3.1 3.6
5.6 6.0 -2.0 5.6 6.1 4.0 4.5
-0.2 -0.6 -0.2 1.7 -0.6 0.0 -0.5
-1.5 -1.6 -1.5 -1.5 -0.7 -0.8 -0.6
-0.6 0.1 -2.1 1.8 0.1 -0.3 0.0
Unemployment rate (a)
8.2 4.9 6.1 5.6 5.6 5.4 5.1
11.5 10.9 4.0 1.9 11.1 9.6 6.7
6.6 6.9 5.8 -1.9 6.2 5.9 3.2
: : : : : : :
8.0 6.8 4.1 5.2 13.4 10.7 5.8
5.2 3.9 2.3 4.1 12.0 9.7 4.6
1.9 2.1 3.3 0.9 -0.7 3.7 0.4
-9.6 -8.0 -8.6 -9.6 -11.3 -10.0 -10.1
-5.5 -4.9 -5.2 -6.5 -8.8 -7.6 -7.4
-3.2 -4.3 -9.2 -7.1 -6.2 -4.7 -4.4
-1.7 -4.6 -7.4 -6.2 -5.8 -4.3 -4.1
27.2 35.1 46.9 48.6 47.3 45.6 46.1
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Notes: Due to a break in historical employment data in 2021, employment-related variables have been affected (employment, unemployment as well as
cyclically-adjusted and structural fiscal indicators).
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.26.1:
Main features of country forecast - ROMANIA
2021
Annual percentage change
GDP
27. SWEDEN
124
Economic activity set to contract in 2023
negatively affected domestic demand. The broadening of price increases to non-energy spending
categories further eroded real wages as the year progressed. The housing market reacted strongly
to higher mortgage rates and lower purchasing power, dragging down construction activity. Gross
fixed capital formation outside construction was affected less as companies had healthy balance
sheets and internal funding. In addition, high energy prices led to investments in energy savings.
Private consumption is projected to contract in
from higher mortgage costs and price levels. The
weak housing market will continue to weigh on
construction activity and, together with broader
uncertainty and cost developments, is set to pull
overall investment down. The strong decline in
domestic demand in Sweden relative to its trading
partners is expected to reduce imports more than
exports, thereby supporting net trade. Overall, real
GDP is forecast to contract by 0.5% in 2023,
before growing again in 2024 at 1.1%, when a
recovery in real disposable income should support
consumption growth. Investment is set to still
suffer from the housing market slump, rising real interest rates and declining corporate profit
margins.
Risks to the outlook are broadly balanced. A further correction on the housing market could
negatively affect growth, whereas higher confidence could reduce the rebuilding of household
balance sheets to the benefit of faster consumption growth.
The labour market shows resilience
The adverse economic developments in Sweden are expected to affect employment mainly in
construction and real estate. In other sectors, labour shortages and labour hoarding are projected
to keep the overall impact on the labour market limited. In addition, wage agreements only
partially compensated for the loss in purchasing power. The resulting lower real wages could
induce more productive workers to find better paid jobs in more productive companies, leading to
non-inflationary wage drift. The unemployment rate is set to increase from 7.5% in 2022 to 8.0%
in 2024.
Inflation to fall gradually
After peaking at the end of 2022, headline inflation has decreased on the back of dropping energy
prices. However, it is expected t
somewhat during 2023, on account of a continued strong pass-through of past high energy prices
The Swedish economy is projected to contract in 2023 as tightened monetary conditions and high
construction activity and retail trade. In 2024, the economy is expected to return to growth on the
back of a solid labour market, falling inflation and real disposable income recovery. Inflation is set
to be sticky in 2023 due to the lagged pass-through of high energy prices to core inflation. The
general government balance is forecast to show a deficit in 2023 (-0.9% of GDP) and 2024 (-
0.5%). General government debt is set to decline from 33% in 2022 to just under 31% of GDP in
2024.
-4
-2
0
2
4
6
15 16 17 18 19 20 21 22 23 24
Graph II.27.1: Sweden - Real GDP growth and
contributions
Net exports Investment
Priv. consumption Gov. consumption
Inventories Real GDP (y-o-y%)
forecast
pps.
Non-EA Member States, Sweden
125
to core inflation. Contained medium-term inflation expectations, the tightening of monetary
conditions and improving productivity growth should allow for headline inflation to return to just
below 2% in 2024.
Weakening fiscal outlook
After a surplus of 0.7% of GDP in 2022, the general government balance is expected to turn into a
deficit of 0.9% of GDP in 2023. This is mainly due to revenues falling relative to nominal GDP on
the back of the weakening economy, increasing social transfers and higher government
consumption due to inflation. Gross public spending on the support to households and businesses
for high electricity prices is estimated at close to 0.8% of GDP. Most of this cost is offset by
income generated by transmission fees taken in by the state-owned enterprise Svenska Kraftnät.
The net budgetary cost of the energy support measures is projected in the Commission 2023
spring forecast at 0.1% of GDP in 2023, compared with 0.2% in 2022. The Commission currently
assumes that energy support measures at around 0.1% of GDP will remain in 2024.
Aside from the electricity subsidy, expenditure measures of the 2023 annual budget together with
the additional spring amending budget are modest, representing less than 1% of GDP. However,
government investment is set to continue growing over the forecast horizon, reflecting the build-up
of defence spending towards the goal of 2% of GDP.
Even as growth returns in 2024, the general government balance improves only modestly to a
deficit of 0.5% of GDP. Government consumption and transfers are expected to expand further due
to lagged impacts of price level increases. Tax revenue is projected to be relatively weak as
inflation recedes. Deficit developments in 2023 are also affected by the assumed complete
phasing out of COVID-19 emergency temporary measures, which are estimated to have amounted
to 1.1% of GDP in 2022.
The public debt-to-GDP ratio is projected to decline over the forecast horizon and reach just over
30% in 2024, mainly due to a denominator effect. The decline also reflects the last debt-reducing
repayment of a Riksbank loan for foreign currency reserves equivalent to around 3½% of GDP over
2021-23, as well as debt management effects.
bn SEK
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
5462.0 100.0 2.2 2.0 -2.2 5.4 2.6 -0.5 1.1
2402.6 44.0 2.4 0.7 -3.2 6.3 2.1 -1.7 1.2
1409.2 25.8 1.2 0.3 -1.8 2.8 0.0 0.7 0.1
1388.7 25.4 3.2 -0.3 1.7 6.0 5.2 -3.2 -0.2
2527.7 46.3 3.6 6.0 -5.5 10.0 6.6 2.0 2.6
2285.0 41.8 4.0 2.1 -6.0 11.5 8.7 -1.1 1.4
5678.4 104.0 2.3 3.0 -1.6 5.7 2.5 -1.0 1.0
2.2 0.3 -1.5 5.0 2.2 -1.4 0.5
0.1 -0.1 -0.7 0.5 1.0 -0.7 0.0
0.0 1.8 0.0 -0.1 -0.6 1.6 0.7
0.9 0.6 -1.3 1.2 2.7 0.2 0.3
Unemployment rate (a)
7.3 7.0 8.5 8.8 7.5 7.7 8.2
3.1 2.9 2.5 4.3 2.8 4.0 3.7
1.8 1.5 3.4 0.2 2.9 4.8 2.8
12.4 18.0 19.5 18.5 16.1 17.3 17.5
1.7 2.5 2.0 2.9 5.7 5.7 1.6
1.4 1.7 0.7 2.7 8.1 6.0 1.9
0.0 1.1 1.1 0.5 -4.2 1.2 0.0
4.6 3.9 4.0 3.9 3.4 4.8 5.4
5.2 5.2 6.0 6.5 4.4 5.9 6.3
0.4 0.6 -2.8 0.0 0.7 -0.9 -0.5
0.3 0.4 -0.7 0.3 0.6 0.1 0.7
41.9 35.5 39.8 36.5 33.0 31.4 30.7
Trade balance (goods) (c)
Current-account balance (c)
General government balance (c)
Structural budget balance (d)
GDP deflator
Harmonised index of consumer prices
General government gross debt (c)
(a) Eurostat definition. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Terms of trade goods
Employment
Contribution to GDP growth:
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
Domestic demand
Inventories
Net exports
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
GNI (GDP deflator)
Private Consumption
Table II.27.1:
Main features of country forecast - SWEDEN
2021
Annual percentage change
GDP
Candidate Countries
28. ALBANIA
128
The Albanian economy grew by 4.8% last year driven by private consumption and investment. The
exceptionally strong private consumption growth was boosted by increasing employment, real
wages and social transfers. In addition, private investment, including high inflows of foreign direct
investment, stimulated growth. A better-than-expected tourism season pushed up services exports,
while goods exports, mainly of primary commodities, construction materials and textiles, benefited
from price advantages. Strong domestic demand and elevated electricity import needs resulted in
a large negative contribution of net exports to growth.
Although business sentiment has continuously
improved since November across sectors, business
lending started to fall at the end of 2022 and
rising interest rates are projected to hold back
private investment in 2023. Coupled with base
effects and weak growth of public investment as
post-2019 earthquake reconstruction is set to
end, investment growth is expected to decline to
1.3% in 2023. Public consumption is projected to
be subdued. Private consumption growth is
forecast to decelerate but remain strong at above
3%, supported by increasing employment and
wages, which should be boosted by announced
raises in public and minimum wages. Slowing
domestic demand is projected to dampen import growth, while sluggish external demand is
expected to weaken goods exports. However, service exports are expected to remain relatively
unaffected by the slowing economic performance of trade partners, as Albania remains a relatively
cheap and attractive tourist destination. Overall, supported by the expected resilience of household
consumption, GDP growth is forecast at 2.9% in 2023, with net exports projected to have a neutral
growth contribution. In 2024 output growth is forecast to rebound to 3.8% as the growth prospects
ion is set to continue falling. Moderate
employment growth in 2023 and 2024 amid continuing mobilisation of inactive parts of the
population is expected to gradually decrease the unemployment rate to about 10.3%.
This outlook is subject to downside risks, mainly related to the vulnerability of the dominant
rainfall-dependent hydroelectric production to weather conditions, more persistent than forecast
inflationary pressures, and increasing shortages of skilled labour aggravated by emigration.
Monetary policy normalisation set to continue
Since its peak of 8.3% in October 2022, annual inflation has been on a declining path and is
forecast to fall to 4.6% in 2023. The Bank of Albania has so far raised the key policy interest rate
by 250 bps. to 3% to counter the inflationary pressures and is set to continue the normalisation of
Following stronger-than-expected growth in 2022, the pace of economic expansion is projected to
slow down to about 3% in 2023 as tighter financing conditions dampen both private consumption
set to contain export growth.
Decelerating import prices and the continuing appreciation of the domestic currency are expected
to help lower the inflation rate below 5% this year. In 2024, GDP growth is forecast to rebound to
3.8% while inflation is projected to moderate further. The fiscal deficit is set to fall to just above
2% of GDP while, following its sharp drop to 64.6% in 2022, the public debt ratio is forecast to
decrease only gradually.
-8
-6
-4
-2
0
2
4
6
8
10
15 16 17 18 19 20 21 22 23 24
Graph II.28.1: Albania - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Candidate Countries, Albania
129
its monetary policy stance. As import prices decelerate and domestic price pressures abate,
inflation is forecast to approach the 3% target in 2024.
Current account deficit narrowed in 2022
Despite rising commodity import prices, the merchandise trade deficit fell by 1.5 pps. in 2022 due
to the strong performance of goods exports. Coupled with the tourism-driven increase in the
services trade surplus, currency appreciation and strong remittances inflows, this resulted in a 1.7
pps. decrease in the current account deficit to 6% of GDP in 2022. Decelerating import growth,
currency appreciation and improving terms of trade are set to keep the current account deficit
below 6% of GDP in 2023 and 2024.
Public debt ratio falls substantially in 2022
The fiscal cost of subsidising regulated electricity
prices in 2022 was largely compensated by
savings on public investment and interest
payments, while revenue growth was strong.
Coupled with a large increase in nominal GDP, this
helped lower the public debt ratio by almost 10
pps. to 64.6% in 2022. Supported by declining
energy subsidies and one-off revenues, a positive
primary balance is expected to be achieved by
2024 despite a planned increase in public wages.
The fiscal deficit is set to stay around 2.2%,
enabling a moderate pace of public debt
reduction.
50
60
70
80
-8
-6
-4
-2
0
15 16 17 18 19 20 21 22 23 24
% of GDP
Gross debt (rhs) Budget balance (lhs)
forecast
% of GDP
Graph II.28.2: Albania - General government
budget balance and gross debt
bn ALL
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
1856.2 100.0 3.9 2.1 -3.3 8.9 4.8 2.9 3.8
1422.8 76.7 4.2 3.3 -3.4 4.7 6.9 3.3 4.3
221.0 11.9 2.0 2.9 1.5 7.8 -4.8 0.7 1.6
452.0 24.4 2.5 -3.6 -1.4 19.2 7.1 1.3 2.2
581.2 31.3 9.0 2.6 -27.9 52.0 7.5 3.2 4.3
829.9 44.7 4.6 2.3 -19.8 31.5 13.1 2.6 3.8
1830.3 98.6 3.8 0.9 -3.6 9.2 4.3 2.7 3.9
4.5 2.1 -2.9 9.0 6.5 2.9 4.0
-0.5 0.2 -0.6 -0.4 1.8 0.0 0.0
0.0 -0.2 0.2 0.1 -3.5 0.0 -0.2
2.2 2.4 -1.9 0.8 3.7 1.2 1.4
Unemployment rate (a)
14.9 12.0 12.2 11.9 11.3 10.9 10.3
: : : : : : :
: : : : : : :
: : : : : : :
2.3 1.3 0.7 3.5 9.7 4.4 2.9
2.4 1.4 1.6 2.0 6.7 4.6 3.1
-1.1 -2.8 -9.8 1.6 17.3 -0.1 -0.1
-24.3 -22.8 -22.4 -25.2 -23.7 -23.1 -22.8
-10.5 -7.9 -8.7 -7.7 -6.0 -5.9 -5.8
-7.2 -3.2 -7.3 -5.3 -3.3 -2.2 -2.2
: : : : : : :
65.4 65.8 74.3 74.5 64.6 64.3 63.9
GNI (GDP deflator)
Table II.28.1:
Main features of country forecast - ALBANIA
2021
Annual percentage change
GDP
Private Consumption
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
Contribution to GDP growth:
Domestic demand
Inventories
Net exports
General government balance (c)
Employment
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Trade balance (goods) (c)
Current-account balance (c)
Consumer price index
Terms of trade goods
Structural budget balance (d)
General government gross debt (c)
(a) as % of total labour force. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
29. MONTENEGRO
130
Deceleration following 2022 economic expansion
After recording strong growth in the first half of 2022, the economy decelerated in the second half
of the year, bringing full-year real GDP growth to 6.1%. High inflation and political uncertainty
were the main headwinds. In 2022 overall, economic activity was driven by surging private
consumption and exports, benefiting from policy measures, including a sharp rise in the minimum
wage and the abolition of mandatory health insurance contributions. It was also supported by the
inflow of Russian and Ukrainian nationals and by the continuing recovery in tourism. In contrast,
gross fixed capital formation declined, while government consumption registered only a slight
expansion. The increase in domestic demand resulted in a rapid expansion of imports.
Presidential elections took place in April, while
snap parliamentary elections are set for June.
While they might result in a more stable political
situation, uncertainties remain high, with the likely
postponement of the reform process and the
diversion of the focus from imminent economic
challenges. Consequently, the present outlook
forecast horizon, which is likely to increase risks to
the outlook.
The growth deceleration is set to continue amid
headwinds from high inflation, tighter financing
conditions, still high political uncertainty, as well
as weaker external demand. As a result, economic growth is set to moderate in 2023 as these
factors, along with base effects, will weigh on private consumption, recovery of investment and
tourism exports. Yet GDP growth could regain some momentum in 2024 as capital investments are
likely to increase on the back of a more stable political environment and stabilising financing costs.
The trade and current account deficits are projected to narrow in 2023 due to the expected
slowdown in private consumption growth. External deficits are expected to widen to some degree
again in 2024 following higher investment.
The balance of risks is tilted to the downside due to the subdued growth outlook in the EU, rising
narrow export base makes it vulnerable to fluctuations in international demand, and elevated
The banking sector is well-capitalised and has ample liquidity. However, while banks would
continue supporting the economy, rising borrowing costs are set to cool down loan demand in
2023. The expected acceleration of investment in 2024 could support credit activity, in particular
for the corporate sector.
Falling but still high unemployment
The rebound of tourism and measures adopted in late 2021, such as abolishing mandatory health
contributions and increasing the non-taxable share of wages, had a positive impact on job creation,
with the unemployment rate declining to a record low of 15% in 2022. Notwithstanding
and a good tourism season. However, growth started to decelerate in the second half of the year
which is projected to continue in 2023 as high inflation and increasing borrowing costs weigh on
household consumption and investment, despite a noticeable increase in public sector wages,
pensions and social benefits. The budget deficit is forecast to fall only gradually.
-18
-14
-10
-6
-2
2
6
10
14
15 16 17 18 19 20 21 22 23 24
Graph II.29.1: Montenegro - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Candidate Countries, Montenegro
131
decelerating employment growth in 2023-2024 amid weakening domestic and external demand,
the unemployment rate is set to continue falling to just below 14%.
Inflation set to ease despite high consumer prices
Inflation started to decelerate in 2023 with monthly readings declining to 10.5% y-o-y in March
from 16.2% in January. This trend is expected to continue in 2023-2024, on the back of stabilising
food and oil prices, even though annual average consumer price inflation is projected to stay
elevated at around 8% in 2023 due to high increases in wages adopted in 2022.
Weakening fiscal position
The 2022 budget deficit was 5.2% of GDP, much higher than the 2021 deficit (1.9% of GDP), but
driven by a
combination of higher-than-projected revenue, mainly from VAT, and lower-than-expected
spending, on the back of under-execution of investment and lower spending on wages as a result
of delays in planned employment. Higher-than-projected nominal GDP also contributed. Going
forward, the general government deficit is projected to remain at a high level, due to a weakened
revenue base and a series of new mandatory spending measures for public sector wages, social
transfers and pensions, the full-year effect of which will be felt from 2023 onwards.
Overall, the balance of risks to the fiscal outlook remains tilted to the downside due to high
borrowing costs and the lack of a fiscal consolidation plan.
mio EUR
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
4955.1 100.0 3.2 4.1 -15.3 13.0 6.1 3.0 2.9
3617.1 73.0 : 3.1 -4.6 4.0 9.7 3.2 2.8
976.6 19.7 : 1.0 0.8 0.5 1.2 2.3 2.2
1096.2 22.1 : -1.7 -11.9 -12.3 -1.1 2.4 4.4
2122.5 42.8 : 5.8 -47.6 81.9 22.7 7.7 5.2
3081.9 62.2 : 2.7 -20.1 13.7 21.3 5.8 4.4
5057.4 102.1 : 4.0 -14.9 13.6 6.0 2.8 -1.6
4.9 1.9 -6.4 0.0 7.6 3.4 3.4
-0.4 1.5 -1.0 0.2 2.5 0.0 0.0
-1.7 0.7 -7.8 12.9 -3.5 -0.4 -0.5
: 2.6 -10.1 6.9 5.7 1.4 1.5
Unemployment rate (a)
18.4 15.4 18.3 16.8 15.0 14.1 13.9
: : : : : : :
: : : : : : :
: : : : : : :
: : : : : : :
2.9 0.5 -0.8 2.5 11.9 8.0 4.9
: : : : : : :
-42.1 -41.7 -39.2 -38.7 -46.2 -45.3 -45.0
-14.9 -14.3 -26.1 -9.2 -13.3 -10.3 -12.3
-3.0 -1.9 -11.1 -1.9 -5.2 -4.7 -4.5
: : : : : : :
48.2 76.5 105.3 82.5 69.5 71.0 71.6
GNI (GDP deflator)
Table II.29.1:
Main features of country forecast - MONTENEGRO
2021
Annual percentage change
GDP
Private Consumption
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
Contribution to GDP growth:
Domestic demand
Inventories
Net exports
General government balance (c)
Employment
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Trade balance (goods) (c)
Current-account balance (c)
Consumer price index
Terms of trade goods
Structural budget balance (d)
General government gross debt (c)
(a) as % of total labour force. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
30. NORTH MACEDONIA
132
Domestic demand to drive growth
Following a partial recovery from the recession caused by the COVID-19 pandemic, North
Annual GDP growth slowed from 3.9% in 2021 to 2.1% in 2022, as external demand weakened,
disruptions in global supply chains persisted and global food and energy prices rose sharply,
weighing on domestic demand. While pensions and wages dropped in real terms, rising remittances
supported disposable incomes and private consumption. Looking forward, GDP is projected to grow
at a similar rate in 2023 (+2.0%) before rebounding somewhat in 2024 (+3.1%). Household
spending, although less buoyant than in 2022, remains the key growth driver over the forecast
horizon. Investment growth is projected to remain robust with some further build-up of inventories.
The negative contribution from the external side is expected to diminish over the forecast horizon,
in line with increasing foreign demand and lower import growth, reflecting also some base effects.
The current account deficit rose markedly in 2022,
on account of a sharp widening of the energy
dependence on energy imports. A marked increase
in private transfers (remittances) and in the
services surplus, helped by a rebound in tourism,
partly offset the deterioration in the energy trade
balance. The projected narrowing of the current
account deficit over the forecast horizon is mainly
due to a significant improvement in the goods
trade balance, due to lower commodity prices, as
well as stronger external demand, supported by
an easing of supply chain pressures. Metal
increasing again, with metal prices stabilising.
The labour force continues to decline
While fiscal support to employers was gradually withdrawn in the second half of 2022, the labour
market continued to prove resilient. Yet, the decline in the unemployment rate masks a large drop
in the labour force, with the bulk accounted for by women. Labour market participation, already
low, dropped further in 2022. These trends were particularly marked for young workers. During the
forecast period, employment is expected to continue growing at a moderate pace as companies
are still cutting down production due to high input cost, impacting on job creation. Meanwhile the
unemployment rate is projected to decline further as the labour force is expected to shrink further.
Core inflation is projected to subside in 2023
Annual inflation rose to 14.2% on average in 2022, compared to 3.2% in 2021. Food and energy
together account for almost 60% of the domestic CPI structure, and price increases in these two
categories explain about three quarters of headline inflation, which peaked at 19.8% in October
2022, reflecting the high pass-through of the global commodity price shock. While headline
inflation dropped to 14.7% in March, core inflation persists, on lagged spillovers from energy and
annual GDP growth slowing to 0.6% in the fourth quarter. Energy and food prices have come
down since, while core inflation, which has been sticky up to early 2023 is expected to abate
throughout the year. After a further slowdown in 2023, economic growth is set to pick up in 2024,
driven entirely by domestic demand. The fiscal deficit is projected to fall gradually.
-10
-8
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.30.1: North Macedonia - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Candidate Countries, North Macedonia
133
food prices to other components. These effects are expected to abate over the summer, following
the recent decline in energy and food prices.
Fiscal consolidation plans remain vague
The general government deficit, at 4.5% of GDP in 2022, remained below the revised target of
5.3%, due to an inflation-driven increase in revenue and underspending on energy subsidies and on
public investment. The deficit is projected to decline gradually in 2023 and 2024, but to remain
well above the pre-pandemic level of 2.2% in 2019. While the crisis support is phased out, the
government plans a large increase in public infrastructure. In 2023, capital expenditure is projected
to rise by 70% compared to the 2022 outturn, even though implementation is likely to remain
partial. The expected boost to tax income in 2023, resulting from tax-base-broadening reforms
adopted by the government in December 2022, depends on a swift adoption of these reforms by
the parliament. Planned savings in current expenditure are largely based on unspecified cuts in
government consumption. Yet, in the light of energy price developments, there is room for savings
from the generous allocations for energy subsidies. The government has phased out some
untargeted measures, such as subsidies for social contributions on pay increases. It is normalising
the VAT rate on electricity in the course of 2023. General government debt is projected to remain
above 50%, due to the elevated primary deficit.
Risks are mainly on the downside
s investment agenda faces
significant obstacles on account of persistent shortcomings in public investment management. The
parliament in a timely manner. On the o
act as a catalyst to important structural reforms, including in fiscal governance, raising the
bn MKD
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
720.4 100.0 3.2 3.9 -4.7 3.9 2.1 2.0 3.1
487.8 67.7 3.1 3.7 -3.6 8.1 3.1 2.3 2.8
115.2 16.0 0.3 2.5 9.8 -0.4 -2.6 -0.2 1.0
167.7 23.3 4.0 8.7 0.4 0.1 5.8 4.5 5.0
477.0 66.2 8.7 8.9 -10.9 11.7 13.4 4.9 5.9
592.6 82.3 7.4 10.1 -10.9 11.9 16.1 5.8 5.1
688.9 95.6 3.0 3.1 -3.2 2.8 2.1 2.5 2.8
3.3 4.6 -0.9 5.3 3.0 2.7 3.4
0.8 1.3 -5.2 0.2 3.5 1.2 0.1
-0.8 -2.0 1.5 -1.6 -4.4 -1.8 -0.4
1.9 5.1 -0.4 1.1 0.5 0.9 0.8
Unemployment rate (a)
30.9 17.3 16.4 15.4 14.5 14.2 13.9
: 7.8 2.0 5.7 7.0 8.0 7.0
: 9.0 6.6 2.8 5.4 6.8 4.6
: : : : : : :
2.8 0.9 1.4 3.6 8.0 12.3 7.5
1.7 0.8 1.2 3.2 5.8 7.9 3.7
: : : : : : :
-21.9 -17.5 -16.6 -10.2 -26.8 -25.5 -23.6
-2.8 -3.0 -2.9 -3.1 -6.0 -4.1 -3.8
-1.6 -2.1 -8.2 -5.4 -4.5 -3.9 -3.5
: : : : : : :
32.6 40.5 50.8 52.0 50.9 51.5 53.0
GNI (GDP deflator)
Table II.30.1:
Main features of country forecast - NORTH MACEDONIA
2021
Annual percentage change
GDP
Private Consumption
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
Contribution to GDP growth:
Domestic demand
Inventories
Net exports
General government balance (c)
Employment
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Trade balance (goods) (c)
Current-account balance (c)
Consumer price index
Terms of trade goods
Structural budget balance (d)
General government gross debt (c)
(a) as % of total labour force. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
31. SERBIA
134
After deceleration in 2022, growth to remain subdued in 2023 dampened by high inflation
Following a strong rebound in 2021, the expansion of the Serbian economy decelerated
substantially in 2022. Real growth was 2.3%, mostly driven by private consumption and higher
inventories, that were partially offset by lower net exports and investments. On the production
side, the services sector accounted for the bulk of annual growth, while agriculture and
construction contributed negatively due to the drought and base effects from high construction
activity in 2021. Economic growth is projected to slow to 1.9% in 2023, mostly on the back of
decelerating private consumption growth as still high average inflation dents real disposable
income. Despite reduced t
contribution of net exports to growth is expected to improve due to decelerating imports and
increased export performance supported by recent foreign direct investment in the tradable sector.
GDP growth in 2024 is projected to be mostly driven by private consumption and some pick-up in
investment. The economic expansion is however forecast to remain more than a percentage point
below its pre-pandemic rate that was somewhat above 4%. After a sharp increase in 2022, mainly
due to the much higher cost of energy imports, the current account deficit is expected to gradually
narrow in 2023 and 2024.
Unemployment to continue gradual decline
Supported by strong employment growth in the
first half of the year, the unemployment rate fell
to 9.4% in 2022. It is projected to continue falling
in 2023 and 2024, albeit at a more moderate
pace, in line with relatively resilient employment
growth.
Inflation to decelerate from high levels
Inflation continued its steady increase in 2022
and early 2023, reaching 16.2% y-o-y in March. It
was initially driven by energy and food prices, but
following persistent cost-push pressures to other industrial products and to services, core inflation
has accelerated and accounted for 70% of consumer price inflation in March 2023. After an
expected peak in spring 2023, inflation is projected to decelerate, partly due to base effects, from
mid-2023 onwards, leading average annual inflation to broadly stabilise in 2023 and to return to
single digits in 2024, supported by the effects of international and domestic monetary tightening
and favourable commodity price developments.
High uncertainty and substantial downside risks
high level of uncertainty while risks appear to be tilted to the downside. Higher or more persistent
inflation than currently projected, particularly due to a durable increase in core inflation in addition
to continued pressure from energy and food prices, could further weaken purchasing power and
thereby weigh on consumption and real growth more than currently anticipated. A deeper-than-
exp
After a substantial deceleration in 2022, economic growth in Serbia is projected to remain
subdued in 2023, as high inflation dampens private consumption, and then to pick up in 2024.
Inflation is set to peak this spring and to decelerate to single-digit levels by the end of the year.
Supported by lower capital transfers to state-owned energy utilities and high nominal GDP
growth, the general government deficit and debt ratios are expected to record further gradual
reductions in 2023 and 2024.
-8
-6
-4
-2
0
2
4
6
8
10
12
15 16 17 18 19 20 21 22 23 24
Graph II.31.1: Serbia - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Candidate Countries, Serbia
135
exports compared to the baseline. On the other hand, increased nearshoring of production could
have beneficial effects on foreign direct investment and exports.
Deficit and debt levels on a downward path
The general government deficit decreased by 1pp. to 3.1% of GDP in 2022. The deficit-reducing
impact of a lower volume of fiscal support measures, lower investment spending, strong revenue
performance and the short-term impact of high inflation on real expenditure was only partially
offset by high capital transfers to state-owned enterprises in the energy sector to finance costly
gas and electricity imports. Supported by lower needs for energy-related capital transfers, the
deficit is forecast to gradually decrease in 2023 and 2024. The general government debt-to-GDP
ratio continued to fall to 55.6% in 2022, mostly as a result of very high nominal GDP growth. The
ratio is projected to gradually decline further, mainly due to the denominator effect amid a
continued robust increase in nominal GDP.
0
10
20
30
40
50
60
70
80
-10
-8
-6
-4
-2
0
2
15 16 17 18 19 20 21 22 23 24
% of GDP
Gross debt (rhs) Budget balance (lhs)
forecast
% of GDP
Graph II.31.2: Serbia- General government
budget balance and gross debt
bn RSD
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
6270.1 100.0 3.0 4.3 -0.9 7.5 2.3 1.9 3.0
4134.2 65.9 2.5 3.7 -1.9 7.8 3.7 2.0 2.8
1056.6 16.9 1.3 1.9 2.8 4.1 0.2 -0.2 0.8
1448.5 23.1 5.8 17.2 -1.9 15.9 -0.6 0.8 2.6
3416.2 54.5 9.2 7.7 -4.2 19.5 17.6 6.7 7.8
3905.0 62.3 7.1 10.7 -3.6 17.7 17.8 5.3 6.2
6026.4 96.1 2.7 4.0 1.5 6.7 0.1 2.1 3.1
3.3 6.3 -1.2 9.3 2.3 1.5 2.6
0.2 0.4 0.3 -1.2 1.4 -0.1 -0.1
1.1 -2.4 0.0 -0.6 -1.5 0.3 0.5
-0.6 2.4 -0.2 2.6 1.8 0.1 0.5
Unemployment rate (a)
18.1 11.2 9.7 11.0 9.4 9.3 9.0
: : : : : : :
: : : : : : :
: : : : : : :
6.8 2.4 2.4 5.9 10.6 12.7 5.6
7.3 1.9 1.6 4.1 11.9 12.4 5.9
: 3.1 1.0 0.4 -3.3 2.1 0.0
-14.4 -12.2 -11.1 -11.3 -15.5 -13.9 -13.7
-7.0 -7.0 -4.1 -4.3 -6.9 -5.5 -5.1
-2.7 -0.2 -8.0 -4.1 -3.1 -2.8 -1.9
: : : : : : :
50.9 52.8 58.6 57.1 55.6 52.1 50.7
GNI (GDP deflator)
Table II.31.1:
Main features of country forecast - SERBIA
2021
Annual percentage change
GDP
Private Consumption
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
Contribution to GDP growth:
Domestic demand
Inventories
Net exports
General government balance (c)
Employment
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Trade balance (goods) (c)
Current-account balance (c)
Consumer price index
Terms of trade goods
Structural budget balance (d)
General government gross debt (c)
(a) as % of total labour force. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
32.
136
Economic outlook marked by elections and earthquakes
The economy avoided a recession in 2022-Q4, expanding by 0.9% q-o-q (3.5% y-o-y).
Exceptionally strong household consumption remained the main growth driver. Robust government
consumption and a pick-up in investment also supported economic activity. High domestic demand,
however, kept imports elevated and was to a large degree offset by a negative contribution of net
exports. Exports suffered a notable setback due to weaker external demand from major trading
partners in the EU. Domestic demand received another boost in early-
pre-election largesse (parliamentary and presidential elections are scheduled for May 2023).The
two devastating earthquakes that hit the country on 6 February caused a tragic loss of life and
destruction of capital assets, darkening the short-term outlook. Although the full impact of the
earthquakes is yet to be assessed, a preliminary damage assessment, which covered 11 of the 17
provinces declared as earthquake-stricken zones (accounting for around 16.
population and around 10% of GDP), estimated the direct costs at USD 103.6 billion (11% of GDP).
High frequency indicators have captured the first negative economic effects of the earthquakes
already in February, with steep monthly falls in industrial production and retail sales.
The direct impact of the February earthquakes on economic growth is likely to be small in 2023.
Real sector and services confidence indexes fell somewhat at first, but rebounded already in
March, while consumer confidence saw a sharp increase in April to a level not seen in nearly five
years. The reconstruction efforts are expected to add to a large pre-electoral boost to domestic
demand, which is forecast to remain the main driver of growth.
Although strong base effects are set to lead to a
sharp slowdown in private consumption growth,
consumer demand is projected to remain robust,
fuelled by solid job creation and an outsize
increase in the minimum wage in 2023. After a
long streak of upbeat investment in machinery
and equipment, private investment growth is
expected to weaken, but public investment
projects should boost the so-far lagging
construction investment and drive up overall
investment. The soft patch in export performance
that had started at the end of 2022 is likely to
reverse only in 2024 as external demand
contribution to growth is forecast to turn negative in 2023. Overall, GDP growth is projected to
moderate to 3.5% in 2023 and to increase somewhat in 2024.
Persisting imbalances
Inflation is forecast to remain high and, in view of the current overly loose monetary policy stance,
to come down only slowly in an environment of unanchored inflation expectations. Despite
improving terms of trade, the current account deficit is set to subside only slowly because of lower
The devastating earthquakes that hit the country on 6 February caused a tragic loss of life, but
also serious damage to the capital stock, darkening the short-term outlook. However, confidence
rebounded quickly and reconstruction efforts are expected to add to the large pre-electoral boost
in domestic demand, which is forecast to remain the main driver of growth. The contribution of
net exports to growth is projected to turn negative in 2023, driving a deceleration of GDP growth.
Reconstruction spending and pre-electoral expenditure pressures are set to lead to a marked
increase in the budget deficit. Policy uncertainty is large, also in view of the upcoming presidential
and parliamentary elections.
-8
-6
-4
-2
0
2
4
6
8
10
12
15 16 17 18 19 20 21 22 23 24
Graph II.32.1: Türkiye - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
137
exports and still strong imports, including of non-monetary gold. The relative exchange rate
stability since last summer has been achieved with the help of far-reaching regulatory measures,
which, on the other hand, increased the risk of an abrupt exchange rate adjustment ahead.
A growing budget deficit
The budget outturn beat expectations again in
2022, with the central government budget deficit
falling under 1% of GDP. The government planned
a significant increase in the deficit to 3.5% of GDP
in 2023, even before the earthquakes. Although
lower-than-expected international energy prices
are likely to provide some relief, the spending side
of the budget will have to cover large non-
discretionary spending increases. Reconstruction
spending will add to expenditure pressures and
the budget deficit is expected to increase
markedly in the next two years, pushing
government debt moderately up as well.
Riding the uncertainty
Policy uncertainty remains large, also in view of the upcoming presidential and parliamentary
elections. Sustaining the current policy mix, centred around keeping real interest rates deeply
negative and relying on extended and increasingly complex prudential and regulatory measures, is
expected to be increasingly more difficult. Unwinding this complex set of measures will, however,
be challenging. The tightening of global financial conditions constitutes another source of risk in
-term external financing and the low level of disposable foreign
exchange reserves.
0
10
20
30
40
50
-6
-4
-2
0
2
15 16 17 18 19 20 21 22 23 24
% of GDP
Gross debt (rhs) Budget balance (lhs)
forecast
% of GDP
Graph II.32.2: Türkiye - General government
budget balance and gross debt
bn TRY
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
7248.8 100.0 5.6 0.8 1.9 11.4 5.6 3.5 4.0
4008.0 55.3 5.0 1.5 3.3 15.3 19.7 5.9 3.0
946.6 13.1 5.3 3.8 2.5 2.6 5.2 5.0 3.5
2040.0 28.1 9.0 -12.5 7.4 7.4 2.8 3.7 4.5
2559.0 35.3 6.4 4.2 -14.4 24.9 9.1 2.7 5.5
2575.6 35.5 6.4 -5.0 6.7 2.4 7.9 3.9 4.7
7133.5 98.4 5.5 1.7 2.2 11.2 6.3 3.5 4.0
6.2 -2.3 4.2 11.1 12.3 5.1 3.9
-0.4 0.0 4.5 -6.3 -7.1 -1.0 0.0
0.1 2.9 -6.7 6.4 0.4 -0.6 0.1
1.9 -2.3 -4.5 7.5 6.8 3.1 2.7
Unemployment rate (a)
9.7 13.7 13.2 12.0 10.4 10.1 10.1
13.1 22.4 14.7 22.5 71.4 50.3 36.6
9.2 18.7 7.4 18.3 73.4 49.8 34.8
: : : : : : :
9.6 13.8 14.9 29.0 96.0 45.1 32.8
9.7 15.2 12.3 19.6 72.3 45.0 30.3
: : : : : : :
-6.2 -1.7 -5.3 -3.0 -8.2 -7.2 -5.9
-4.3 0.7 -5.0 -1.7 -5.7 -4.2 -2.7
-1.6 -4.4 -4.7 -1.1 -1.2 -4.9 -4.7
: : : : : : :
38.6 32.7 39.7 41.8 31.7 32.7 35.0
GNI (GDP deflator)
Table II.32.1:
Main features of country forecast - TÜRKIYE
2021
Annual percentage change
GDP
Private Consumption
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
Contribution to GDP growth:
Domestic demand
Inventories
Net exports
General government balance (c)
Employment
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Trade balance (goods) (c)
Current-account balance (c)
Consumer price index
Terms of trade goods
Structural budget balance (d)
General government gross debt (c)
(a) as % of total labour force. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
Other non-EU Countries
33. THE UNITED KINGDOM
140
A modest contraction in 2023 and some recovery in 2024 as inflation falls back
The UK economy grew by 4.1% y-o-y in 2022 but this largely reflected the very large statistical
carryover (of 3.6%) from 2021. Growth stagnated after March 2022, under the impact of higher
labour market and government fiscal transfers to offset higher energy costs have helped underpin
household consumption, which grew by 5.6% in 2022, despite a 2% fall in household real
disposable incomes.
Alongside many EU economies, UK high frequency
data improved in early 2023, with PMIs picking up
(notably for services) and consumer confidence
improving, though from low levels. Monthly GDP
data also suggest that output in 2023-Q1 has
remained steady despite widespread expectations
of a contraction. Household consumption is
expected to show no growth in 2023 overall, as
real wages continue to fall, and higher interest
rates feed through into higher mortgage costs.
Consumption is projected to start to gradually
pick-up in the second half of 2023 and into 2024
as lower energy prices feed through with the
adjustment of regulated price caps from July.
Higher interest rates are expected to lead to a fall in residential and business investment in 2023,
with business investment seeing only a modest pick-up in 2024. Export and import volumes are
both set to decrease in 2023, with net exports providing a positive contribution to overall growth.
Goods exports were significantly inflated in 2022 by large exports of precious metals that are
projected to taper off sharply, while services exports will be limited by the weak global outlook.
Services imports are expected to normalise somewhat after a surprising bounce in 2022, given the
weakness of domestic demand. Relatively rapid growth in government consumption and
investment are expected to provide support in 2023, and to a lesser extent in 2024. Overall, UK
GDP growth is forecast to contract by 0.2% in 2023 and then rise by 1% in 2024.
The labour market is tight and potential output is growing only slowly
The labour market remains tight. While employment was still 100K below pre-pandemic levels in
2022Q4, the labour force had fallen by around 280K, and unemployment at year end was just
3.7%. Unemployment is expected to edge up in 2023 and 2024 as employment growth slows
below the growth in labour supply, fuelled in part by higher migration, largely from outside the EU.
Potential output growth in the UK has been lower than the EU average for some years and is
estimated at 0.8% in 2022. This reflects not only a fall in labour market participation, but also the
stagnation of business investment in recent years and weak underlying productivity growth.
The UK economy is expected to see a modest contraction in 2023, as household real incomes
continue to fall and consumption and external demand soften, while business investment remains
weak. A mild recovery is foreseen in 2024, as inflation continues to ease and growing
employment and rising real wages boost household real incomes. At the same time, the labour
market is tight, core inflation is high, and potential output is growing only slowly. Persistence in
core inflation is a key downside risk.
-12
-10
-8
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.33.1: The United Kingdom - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Other non-EU Countries, The United Kingdom
141
Inflation to moderate, but core inflation is a concern
Inflation rose sharply in 2022, from 5.5% in January to a peak of 11.1% in October and slowed
only marginally thereafter, to 10.1% in March 2023. The core inflation rate was 6.2% in March,
only slightly down from the peak of 6.5% in October 2022. As inflation has picked up, wage growth
has also accelerated, with private sector nominal wages growing by 6.6% in both January and
February 2023. The Bank of England raised policy rates steadily from 0.25% in early 2022 to
4.25% in March 2023 and markets have priced in further tightening. Lower energy prices are
expected to reduce headline inflation significantly in coming quarters, but the outlook for core
inflation is less clear, given the high pace of nominal wage growth and the tight labour market.
Deficit expected to fall, though pressures on public finances remain
The public sector deficit is set to narrow in 2023 and 2024, despite a projected rise in government
consumption and investment, due to a combination of tax rises and lower overall spending, notably
on energy support schemes. However, overall plans for public spending set out in the recent March
budget assume almost no rise in nominal spending in the fiscal years 2023-24 and 2024-25.
Given the acute pressures on public sector pay, which has been growing at a much slower pace
than private wages and far below inflation, meeting this objective appears challenging.
Risks appear balanced
Private consumption may prove stronger than expected if nominal wages continue to rise at a fast
pace as headline inflation slows with the moderation of energy price. However, this in turn risks
adding to persistence in core inflation, given the tight labour market and low growth in potential
output. This could in turn entail tighter monetary policy, and a more subdued 2024, than currently
projected. It remains to be seen whether the generous tax incentives for investment introduced in
the March budget will be effective this constitutes an upside risk, given the subdued projection
for investment in the current forecast.
bn GBP
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
2270.2 100.0 1.7 1.6 -11.0 7.6 4.1 -0.2 1.0
1375.6 60.6 1.8 1.1 -13.2 6.2 5.6 -0.5 0.4
508.2 22.4 1.5 4.1 -7.3 12.5 1.8 2.1 1.8
393.5 17.3 1.7 1.9 -10.5 6.1 8.6 -2.1 0.2
654.3 28.8 3.1 1.7 -12.1 2.2 9.9 -4.2 0.2
682.3 30.1 3.2 2.6 -16.0 6.2 13.3 -7.9 -0.9
2282.1 100.5 1.5 3.0 -13.0 10.6 4.2 -0.2 1.0
1.8 1.8 -11.8 7.6 5.3 -0.3 0.7
0.0 0.0 -0.8 1.4 -0.9 -0.7 0.0
-0.1 -0.3 1.5 -1.1 -1.1 1.5 0.4
0.9 1.1 -0.9 -0.3 1.0 -0.2 0.3
Unemployment rate (a)
6.0 3.8 4.6 4.5 3.7 4.3 4.6
3.0 4.0 0.1 5.0 6.3 4.6 2.2
2.3 3.5 11.5 -2.7 3.1 4.6 1.5
7.9 5.3 15.8 12.6 8.5 7.9 9.4
2.1 2.1 5.9 0.0 5.4 5.2 1.8
2.1 1.7 1.0 2.5 7.9 6.7 2.4
0.6 0.8 -1.1 -1.0 -1.5 0.8 0.5
-6.2 -6.6 -6.3 -7.5 -9.3 -8.2 -8.1
-3.5 -2.8 -3.2 -1.5 -3.8 -2.2 -1.7
-4.9 -2.2 -12.8 -8.1 -5.2 -3.2 -2.4
: : : : : : :
67.5 85.5 105.6 105.9 101.0 99.4 99.1
GNI (GDP deflator)
Table II.33.1:
Main features of country forecast - UNITED KINGDOM
2021
Annual percentage change
GDP
Private Consumption
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
Contribution to GDP growth:
Domestic demand
Inventories
Net exports
General government balance (c)
Employment
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Trade balance (goods) (c)
Current-account balance (c)
Consumer price index (CPIH) (e)
Terms of trade goods
Structural budget balance (d)
General government gross debt (c)
(a) as % of total labour force. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP. (e) CPIH is consumer
price index which includes costs of owner-occupied housing
34. THE UNITED STATES
142
Sharp slowdown to follow a strong start in 2023
The US labour market showed remarkable strength in 2023-Q1, helping sustain resilient private
the diminished excess household saving are expected to affect consumer and business spending
negatively, resulting in a marked slowdown of economic growth in the second half of 2023.
Bolstered by a high carryover from last year and robust economic growth in 2023-Q1, annual real
GDP growth is forecast to reach 1.4% in 2023, falling from 2.1% in 2022. Moderating inflation
should allow the central bank to start easing monetary policy from the end of this year or early
2024, helping the economy rebound from the soft patch next year. Although economic growth is
set to pick up momentum next year, overall growth for the year is projected to be just 1% in 2024
due to the weak carryover from 2023.
was partly sustained by excess savings
accumulated during the pandemic, but these
savings have now been largely depleted.
high inflation and the labour market is set to
weaken going forward, negatively affecting
consumer spending. Private consumption is
forecast to slow down from 2.7% in 2022 to 1.8%
in 2023 and to 0.5% in 2024. High interest rates
and declining corporate profitability are expected
to depress investment. The 2021 Bipartisan
Infrastructure Bill and the 2022 Inflation
Reduction Act allocated significant funding for
infrastructure and green investment and are forecast to support non-residential construction
growth over the forecast horizon. Gross fixed capital formation is set to contract by 1.1% in 2023,
while easing financing conditions are projected to support a rebound of 2.5% in 2024.
A weakening outlook for employment
Continued labour market resilience has outweighed the impact of high interest rates so far. Growth
of total nonfarm payroll employment ticked up, the unemployment rate has been hovering around
a historically low of 3.5% and the labour force participation rate has risen to 62.6%, with prime
age workers now back to pre-pandemic rates in 2023-Q1. These employment gains have been
keeping household balance sheets strong and encouraging consumers to keep spending. The
on the labour market. Labour demand is forecast to ease in the coming quarters and the
unemployment rate is projected to increase to 4.1% in 2023 and to 4.8% in 2024.
Inflation is on a downward trend, but credit conditions are tighter
Consumer price inflation peaked at 8.6% in 2022-Q2 and has been on a downward trend since
then, reaching 5.8% in 2023-Q1. Headline inflation is set to moderate further over the forecast
horizon as prior drivers, including supply chain disruptions, high energy prices and a tight labour
market are set to gradually relent. Services inflation may be slower to decline, as household
services consumption has still not reached the pre-pandemic trend, while rent inflation is projected
The US economy is forecast to slow down in 2023 as higher interest rates pass through to cost of
credit, negatively affecting consumer and business spending. Moderating inflation and easing
monetary policy are projected to support the economy in rebounding from the soft patch next
year. Risks are higher than usual and are tilted to the downside.
-3
-2
-1
0
1
2
3
4
5
6
7
8
15 16 17 18 19 20 21 22 23 24
Graph II.34.1: The United States - Real GDP growth and
contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
Other non-EU Countries, The United States
143
to remain elevated for some time reflecting past house price increases. After reaching 8% in 2022,
consumer price inflation is expected to moderate to 4.3% in 2023 and then to 2.6% in 2024. While
bond yields may slowly decline as monetary policy tightening stalls and then slowly reverts, credit
conditions tightened due to increasing risk premia in the context of the recent banking sector
turmoil. The US authorities have taken prompt measures to avoid contagion effects, but the
turmoil brought banking sector fragilities to the fore and concerns remain about the health of
smaller and midsize banks.
Fiscal outlook and debt ceiling discussions
The general government deficit fell from around 12% of GDP in 2021 to around 4% of GDP in
2022, as the pandemic-era spending programmes were phased out. As domestic demand cools
and debt service payment rises, the general government deficit is projected to increase to 5% of
GDP in 2023 and to 5.5% of GDP in 2024. General government debt is expected to hover around
-term elections, discussions about the
debt ceiling have re-emerged. The debt ceiling was already reached in January 2023 and the US
Treasury estimates that the US government will run out of options to meet its obligations without
raising the debt ceiling already in early June.
Risks are tilted to the downside
Inflation that stays higher for longer and a stronger than assumed monetary tightening remain the
main downward risks to the outlook. Although prompt policy intervention by the US authorities has
contained a financial market turmoil so far, the risk of a potential credit crunch has not
di
vacancy rates and high loan refinancing rates, should be closely monitored. A failure to reach an
agreement on the debt ceiling, or an agreement reached at a very late stage, could have
significant negative consequences for the US economy, with possible sizeable spillovers also on
the global economy, especially on the (more vulnerable) emerging and lower-income economies.
bn USD
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
23315.1 100.0 2.0 2.3 -2.8 5.9 2.1 1.4 1.0
15902.6 68.2 2.2 2.0 -3.0 8.3 2.7 1.8 0.5
3353.7 14.4 0.7 3.4 2.2 1.3 -0.2 1.8 0.6
4939.6 21.2 2.3 2.6 -1.2 5.7 -0.5 -1.1 2.5
2539.6 10.9 4.5 0.5 -13.2 6.1 7.1 3.6 2.6
3401.4 14.6 3.5 1.1 -9.0 14.1 8.1 -1.6 0.9
23488.2 100.7 2.1 2.2 -3.1 5.7 2.0 1.3 1.0
2.0 2.4 -2.0 7.0 1.7 1.2 0.9
0.0 0.0 -0.7 0.2 0.7 -0.5 -0.1
0.0 -0.1 -0.3 -1.2 -0.4 0.7 0.2
0.7 1.2 -5.8 3.4 3.7 1.0 0.1
Unemployment rate (a)
6.2 3.7 8.1 5.3 3.5 4.1 4.8
2.9 2.8 6.9 5.0 4.2 4.0 2.6
1.6 1.8 3.6 2.4 6.0 3.6 1.6
11.6 14.4 22.1 17.4 12.3 11.8 12.0
1.9 1.8 1.3 4.5 7.0 3.7 2.4
2.1 1.8 1.2 4.7 8.0 4.3 2.6
-0.1 0.6 -1.1 5.9 3.5 -1.0 0.3
-4.9 -4.1 -4.2 -4.7 -4.8 -4.2 -4.0
-3.5 -2.1 -2.8 -3.7 -3.9 -3.3 -3.0
-6.8 -6.7 -14.9 -12.1 -4.0 -5.0 -5.5
: : : : : : :
87.0 108.5 131.8 127.0 123.4 121.8 122.8
GNI (GDP deflator)
Table II.34.1:
Main features of country forecast - UNITED STATES
2021
Annual percentage change
GDP
Private Consumption
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
Contribution to GDP growth:
Domestic demand
Inventories
Net exports
General government balance (c)
Employment
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Trade balance (goods) (c)
Current-account balance (c)
Consumer price index
Terms of trade goods
Structural budget balance (d)
General government gross debt (c)
(a) as % of total labour force. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
(*) Employment data from the BLS household survey.
35. JAPAN
144
After a surprisingly weak second half of 2022 outlook remains muted
After a strong first half of 2022, economic activity was surprisingly weak in the second half of the
year, despite the lifting of most of the COVID-19 containment measures. Notably, growth in private
consumption was limited by rising inflation. At the same time, private investment turned negative
on increased uncertainty and expectations of softer external demand. Overall, real GDP expanded
by 1% in 2022.
The expansion is expected to continue at a slow
pace in 2023, as growth in private demand
decelerates. On the domestic side, private
consumption continues to be supported by
improving labour market, accumulated savings
during the pandemic and transfers included in the
latest fiscal package. However, the pace of private
consumption growth is set to be hampered by
elevated (by Japanese standards, albeit well
below global trends) inflation, high uncertainty,
and a fading impact of reopening. Despite lower
corporate profit margins, private investment is
likely to finally recover backed by the still
accommodative financing conditions and rising IT-
related expenditures. At the same time, public spending growth is set to decelerate reflecting the
relatively limited size of new measures that support public expenditures. Overall, real GDP growth
is expected to reach 1.1% in 2023.
On the external side, export growth is set to remain relatively robust in line with the weak currency
and improving supply chains, although weakening global demand prospects are expected to limit
the scale of the expansion. Services trade, in particular tourism, is likely to recover strongly amid
the full re-opening of Japan to foreign tourists (notably Chinese). Import growth is projected to
moderate, reflecting a delayed effect of the recent currency depreciation. Overall, net exports are
set to be broadly neutral to growth over the forecast horizon, while the current account surplus is
projected to bounce up to ca. 2.6% of GDP in 2023 and 3.4% of GDP in 2024, driven by lower
commodity prices and stronger inbound tourism.
Growth is forecast to edge down to 1% in 2024 as private demand softens further. Private
ing and lower fiscal
support, although falling inflation should support growth of real disposable income. At the same
time, modest global and domestic growth prospects are likely to restrain the private investment
outlook, despite continued accommodative monetary policy and lower input costs. The dissipating
cyclical recovery is expected to reveal the dampening impact of long-term structural challenges on
growth (e.g. declining labour supply, low productivity).
Risks to the outlook are broadly balanced. On the downside, major risks to growth are related to a
more persistent-than-forecast inflation that would increase the pressure on the Bank of Japan to
tighten policy, clouding the outlook for private investment and consumption. On the upside, risks
include a more robust recovery of services and a stronger-than-expected recovery of inbound
tourism.
After an unexpectedly weak second half of 2022, economic activity in Japan is expected to grow
at a moderate pace in 2023 amid elevated inflation, dissipating fiscal support and a soft external
outlook. Growth is set to edge down further in 2024 reflecting gradual deceleration toward
potential. Headline average annual consumer inflation is set to remain above the central bank
target of 2% in 2023, before subsiding in 2024 on softening demand pressures.
-5
-4
-3
-2
-1
0
1
2
3
15 16 17 18 19 20 21 22 23 24
Graph II.35.1: Japan - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecastpps.
Other non-EU Countries, Japan
145
Inflation is back, at least in the near term
After rising continuously since the beginning of 2022, headline inflation is expected to have peaked
of 4.3% in January 2023, reflecting higher utility bills, rising commodity prices and a weaker
currency. It declined to 3.2% in March 2023 on account of special, policy-related factors. However,
core inflation (excluding energy and fresh food) remained elevated at 3.8% in March 2023, the
highest level since 1981. Going forward, annual headline inflation is expected to increase from
2.5% in 2022 to 3.2% in 2023 reflecting rising utility prices, delayed effects of the depreciating
yen and increased tourist arrivals as borders reopen fully. In 2024, inflation is projected to subside
to 1.8% on account of base effects of lower commodity prices and softening domestic demand.
Monetary policy is likely to remain accommodative over the forecast horizon, also reflecting
standing structural disinflation, as long as no significant second second-round effects
appear.
Fiscal support to be gradually discontinued
A large fiscal package announced in October 2022, which included subsidising prices of electricity,
gas, oil, and cash transfers to couples with children, is forecast to lead to an elevated fiscal deficit
of around 6.5 % of GDP in 2023. However, these fiscal measures are expected to be gradually
discontinued towards the end of the forecast horizon resulting in a decline of the fiscal deficit to
4.4 % of GDP in 2024. Public debt is forecast to decline from around 259% of GDP in 2022 to
around 252% of GDP in 2024.
bn JPY
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
549379.3 100.0 0.8 -0.4 -4.3 2.1 1.0 1.1 1.0
293986.4 53.5 0.6 -0.6 -4.7 0.4 2.1 1.0 0.8
117710.6 21.4 1.3 1.9 2.4 3.5 1.5 0.5 0.4
140608.1 25.6 0.1 0.5 -3.6 -0.1 -1.1 1.9 1.2
99995.7 18.2 4.4 -1.5 -11.6 11.7 4.9 4.3 2.8
102947.9 18.7 3.0 1.0 -6.8 5.0 7.9 3.9 2.1
576048.0 104.9 1.0 -0.3 -4.5 3.3 2.4 0.7 0.8
0.6 0.2 -3.0 0.9 1.2 1.2 0.8
0.0 -0.1 -0.5 0.2 0.4 0.0 0.0
0.2 -0.4 -0.8 1.0 -0.6 -0.1 0.1
0.3 0.9 -0.5 -0.1 0.2 -0.1 -0.1
Unemployment rate (a)
4.0 2.4 2.8 2.8 2.6 2.5 2.4
-0.2 0.8 -0.8 2.0 2.3 3.1 2.2
-0.7 2.1 3.1 -0.3 1.4 1.9 1.1
10.3 10.8 18.0 15.0 14.7 14.2 13.9
-0.5 0.6 0.9 -0.2 0.2 3.4 2.5
0.2 0.5 0.0 -0.2 2.5 3.2 1.8
-2.4 0.9 6.8 -9.1 -13.2 4.5 3.6
0.8 0.0 0.5 0.3 -2.8 -2.1 -1.3
3.0 3.5 2.9 3.9 2.1 2.6 3.4
-5.6 -3.0 -9.1 -6.2 -8.0 -6.5 -4.4
:
:
: : :
:
: : :
204.3 236.4 258.7 255.4 258.9 255.1 252.3
GNI (GDP deflator)
Table II.35.1:
Main features of country forecast - JAPAN
2021
Annual percentage change
GDP
Private Consumption
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
Contribution to GDP growth:
Domestic demand
Inventories
Net exports
General government balance (c)
Employment
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Trade balance (goods) (c)
Current-account balance (c)
Consumer price index
Terms of trade goods
Structural budget balance (d)
General government gross debt (c)
(a) as % of total labour force. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
36. CHINA
146
Growth resum -
-
policy for most of the year. Strict lockdowns decreased economic activity, while households
increased precautionary savings in response to poor labour market outcomes and high uncertainty.
-zero-
initially impacted labour participation, caused new supply-chain disruptions, and increased
consumer caution in contact-intensive services. Although annual GDP growth still reached 3% in
2022, it was the second lowest annual rate since the 1970s and far below the government target
Economic activity started to improve already in late December 2022 and the expansion continued
throughout 2023-Q1. Real GDP growth exceeded expectations and reached 4.5% y-o-y and 2.2%
q-o-q in 2023-Q1. Despite retail sales increasing markedly only in March (10.8% y-o-y)
consumption provided the largest contribution to growth. Investment remained strong, particularly
from state-owned enterprises (SOEs) and local governments. Contribution of net exports was
neutral, owning to both weak imports and exports.
Growth is expected to rebound to 5.5% in 2023, exceeding the relatively conservative government
pent-up demand from household consumption throughout the year. Growth is forecast to weaken
to 4.7% in 2024, on the back of high corporate and local government debt imbalances, weak
productivity growth and a still subdued external outlook.
The pace of the household consumption recovery
is expected to largely determine growth
performance in 2023. Supported by improvements
in the labour market and reduced uncertainty,
consumer confidence is projected to continue
improving throughout the year, helping to raise
the household spending rate from 66.5% of total
household income in 2022 towards its
pre-pandemic level of around 70%. Accumulated
savings are not expected to provide a major boost
to household spending, as China did not provide
discretionary household income support during the
pandemic, and its social security coverage is still
patchy.
After driving growth in 2022, the investment contribution to growth is expected to be more
subdued in 2023. The local government borrowing quota for 2023, a proxy for new infrastructure
spending, has been set 5% lower than the outturn in 2022. Investment by SOEs is likely to remain
strong, benefiting from favourable access to finance. With restructurings of ailing real estate
companies progressing and authorities relaxing some of the financing restrictions for the sector,
the amount of completed projects rose 15% y-o-y in 2023 Q1. Still, as commencements of new
-
eliminated the main downside risk to their economic outlook, kicking off a recovery already in
early 2023. Improving consumer spending, in particular on services, is projected to drive growth
this year. Investment growth is expected to moderate, as fiscal authorities limit new spending on
infrastructure. Private investment remains sluggish due to the still ongoing crisis in the real estate
sector and weaker external demand. Reflecting recovering domestic demand, import growth is
structural imbalances are set to weigh on growth in 2023 and 2024.
-1
0
1
2
3
4
5
6
7
8
9
15 16 17 18 19 20 21 22 23 24
Graph II.36.1: China - Real GDP growth and contributions
Net exports Investment Consumption
Domestic demand Real GDP (y-o-y%)
forecast
pps.
Other non-EU Countries, China
147
projects fell around 40% in 2022, and another 5% in 2023 Q1, the contribution of the real estate
sector to private investment is expected to be limited in both 2023 and 2024. Furthermore, weaker
external demand for Chinese consumer goods should weigh on new private investment in
manufacturing capacities.
Net exports are forecast to weigh on growth in both 2023 and 2024. Export growth is expected to
remain low as the demand in advanced economies moderates compared to the pandemic period.
The shift in composition was already visible in 2023-Q1, as exports to North America and Europe
declined by 17% and 3% respectively but were offset by increases in exports to Asia (6.3%) and
Africa (19%). Import growth is forecast to pick up, in line with recovering private consumption.
- olicy is improving labour markets, particularly in services.
The unemployment rate decreased in March, and business surveys during 2023 Q1 suggest a pick
up in hiring intentions. A moderately tightening labour market is likely to increase labour costs,
which added to the recovery in consumption and global commodity prices, could put some upward
pressure on inflation in both 2023 and 2024. These pressures, however, are likely to remain well
below the inflation rates seen in most of the world.
Policy support to ease despite significant structural risks
Policy support is expected to remain broadly neutral in 2023 but is ready to be strengthened in
government spending targets, indicating its trust in a strong consumption recovery. Furthermore,
ruggling
SOEs and local government financing vehicles (LGFVs) could be expected in case of market
disturbances.
demographics. Total debt stood at 296% of GDP in 2022 Q3, 32 pps above its pre-pandemic level
increased markedly during the pandemic, strengthening protectionism, friendshoring, and
exacerbating confrontation with
Table II.36.1:
bn CNY
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
GDP
114923.7 100.0 9.3 6.0 2.2 8.5 3.0 5.5 4.7
Private consumption
43801.5 38.1 - - - - - - -
Public consumption
18167.3 15.8 - - - - - - -
Gross fixed capital formation
48211.9 42.0 - - - - - - -
Exports (goods and services)
22824.5 19.9 12.4 0.4 2.6 17.4 -0.7 1.1 2.3
Imports (goods and services)
19872.3 17.3 11.9 -3.7 -0.4 8.9 -5.3 3.2 4.9
GNI (GDP deflator)
- - - - - - - - -
Contribution to GDP growth:
- - - - - - -
- - - - - - -
- - - - - - -
Employment
- - - - - - -
Unemployment rate (a)
4.1 3.6 4.2 4.0 - - -
- - - - - - -
- - - - - - -
Saving rate of households
- - - - - - -
3.9 1.3 0.5 4.5 2.3 3.0 3.0
Consumer price index (c)
2.6 2.9 2.5 0.9 2.0 - -
- - - - - - -
Trade balance (goods) (b)
4.3 2.8 3.5 3.2 3.7 3.3 2.9
3.9 0.7 1.7 2.0 2.2 1.6 1.3
- - - - - - -
- - - - - - -
- - - - - - -
Structural budget balance
(a) urban unemployment, as % of labour force. (b) as a percentage of GDP. (c) national indicator.
General government gross debt (b)
General government balance (b)
Current-account balance (b)
Main features of country forecast - CHINA
2021
Annual percentage change
Inventories
Net exports
Compensation of employees/head
Unit labour costs whole economy
Domestic demand
GDP deflator
Terms of trade goods (b)
37. EFTA
148
Switzerland
Economic growth decelerated in the second half of 2022 due to rising inflation, which eroded
disposable income, and to weaker external demand, which had a negative bearing on
manufacturing output. GDP growth slowed to 0.8% y-o-y, compared to 3.4% in the first half of
2022. The consumer price index rose by 2.8% in 2022, compared to 0.6% in 2021, mainly due to
higher import prices. Tourism recovered but did not yet return to pre-pandemic levels. Despite
weakening disposable income, domestic demand remained solid, among others reflecting a
resilient labour market. The exchange rate against the euro appreciated markedly in 2022-Q3, but
has remained rather stable since then, helping to contain import-driven inflationary pressures. In
early 2023, and as stress erupted in the US banking sector, the count
Crédit Suisse, faced a bank run and was acquired by UBS
immediate economic effects of this financial-sector turbulence have remained limited.
In 2023, growth dynamics are likely to decelerate
markedly, mainly due to a less supportive
international environment and tightening global
financial conditions. The main growth driver during
the forecast period is expected to be private
consumption, benefitting from a resilient labour
market and a moderating inflation. Investment
growth is projected to remain subdued, in
particular in 2023, reflecting persistent global
uncertainties that are expected to hold back
business confidence. Export growth is set to
decelerate in 2023, and to strengthen only in
2024. Import growth is projected to remain
contained during the forecast period, leading to a small positive growth contribution of net exports
in 2024.
Annual consumer price inflation is forecast to fall in 2023, mainly thanks to an expected
moderation in energy prices and reflecting base effects from the previous year. Employment
growth is expected to remain low in 2023, but to accelerate slightly in 2024, benefiting from the
moderately stronger output growth. However, the subdued labour demand is projected to be too
modest to bring unemployment rates to pre-pandemic levels within the forecast horizon, in
particular as increased labour demand is often met by migrant workers from neighbouring
countries. Switz
balanced position in 2023 and to a small surplus in 2024. The gross public debt-to-GDP ratio is set
to continue declining, as a result of improving budget balances and solid nominal output growth.
However, due to the public support involved in takeover, public sector contingent
liabilities have increased significantly.
Besides upward and downward risks related to the global economic environment, country-specific
risks to the outlook stem from the possibility of more persistent domestic inflationary expectations
and a Crédit Suisse-
times of global financial stress.
EFTA countries have so far weathered well the energy-crisis-related turbulences. The economic
outlook for all EFTA countries is for moderate growth in 2023 and some acceleration in 2024,
reflecting subdued, but strengthening external demand. Public finances are set to remain sound.
Due to persistent global uncertainties, the risks to the forecast are largely on the downside.
-6
-4
-2
0
2
4
6
8
10
15 16 17 18 19 20 21 22 23 24
Graph II.37.1: Switzerland - Real GDP growth and
contributions
Net exports Investment
Priv. consumption Gov. consumption
Inventories Real GDP (y-o-y%)
forecast
pps.
Other non-EU Countries, EFTA
149
Norway
The economic rebound lost some steam in 2022 but remained solid, with real GDP expanding by
3.3% compared to 3.9% in 2021. Growth was mainly driven by the pick-up in private consumption
growth, supported by the lifting of COVID-19 containment measures and a tight labour market.
Investment largely recovered thanks to a strong acceleration in business investment growth.
Despite a positive terms of trade effect following high energy prices, the external sector subtracted
from growth as imports grew at a faster rate than exports due to increased domestic demand
after the pandemic.
Economic growth is projected to moderate further in 2023. Private consumption is set to grow only
marginally due to the inflation-induced drop in real disposable incomes, negative consumer
sentiment and a slight increase in unemployment. Higher interest rates and uncertainty about the
economic outlook are set to dampen investment despite an expected rise in oil-sector investment
in line with the initiation of new scheduled projects. House price inflation decelerated to 5.2% in
2022 from 10.5% in 2021 and house prices virtually stagnated in the first quarter of 2023.
Residential investment contracted by 1.4% in 2022, and it is forecast to decline further in 2023
due to concurrent headwinds such as higher input prices and interest rates. Net exports are
expected to add to growth, as imports are set to increase at a slower pace than exports, largely
due to subdued domestic demand (excluding stocks).
Output growth is expected to inch-up in 2024 on
the back of increased domestic demand as well as
a positive contribution of the external sector to
growth.
The sustained increases in energy prices following
ssion against Ukraine fuelled
an acceleration of consumer price inflation to
5.8% in 2022 (up from 3.5% in 2021). In the first
three months of 2023, inflation picked up further,
to 6.6% y-o-
target of 2%. On 22 March, t
Executive Board raised the key policy rate by
another 25 basis points to 3%, after having lifted
it by a cumulative 225 basis points between March 2022 and January.
To help contain inflationary pressures, the government proposes to tighten the fiscal stance by
reducing spending financed by oil revenue in 2023. Policymakers anticipate a structural non-oil
deficit of 8.8% of mainland GDP, with the overall balance remaining firmly in double-digit surplus,
and spending of oil revenues slightly
Domestic risks to the outlook are clearly tilted to the downside. A further depreciation of the Krone
could fuel inflationary pressures and eat into private consumption. Uncertainties in the property
market
could limit domestic demand. Regarding the external environment, the volatility of energy prices
presents both upside and downside risks, while a deterioration in grow
main trading partners would weigh materially on growth.
Iceland
Real GDP expanded by a solid 6.4% in 2022 on the back of a surge of exports, robust private
consumption and investment. Strong export performance was driven by large increases in tourist
arrivals (exceeding the pre-pandemic level of 2019), favourable prices for aluminium products and
a successful fishing season. Private consumption was supported by strong nominal wage growth
(8.3%).
The outlook is for a slowdown in 2023, as higher inflation and interest rates are projected to
weaken private consumption and
-6
-4
-2
0
2
4
6
15 16 17 18 19 20 21 22 23 24
Graph II.37.2: Norway - Real GDP growth and
contributions
Net exports Investment
Priv. consumption Gov. consumption
Inventories Real GDP (y-o-y%)
forecast
pps.
European Economic Forecast, Spring 2023
150
to its reliance on renewable energy, but high import prices of fuels and food are eroding disposable
income. This trend is set to be reversed in 2024, in line with declining inflation.
Solid growth resulted in a tight labour market situation with the unemployment rate declining to
3.6% in 2022. The labour force participation rate reached the historic average of 80%. Strong
demand for labour was partially met with the increasing inflow of foreign workers. In line with
decelerating GDP growth, employment growth is set to moderate, while the rate of unemployment
should hover around the current level.
Strong GDP growth and the lifting of the pandemic-related support measures resulted in a
substantial reduction of the public deficit in 2022. The sought-after tight fiscal stance, which was
confirmed in the 2024 2028 medium-term fiscal strategy, is expected to continue with the aim of
restoring fiscal buffers, reducing public debt and contributing to bringing inflation back to target.
The growth in budget revenue is set to be supported by higher taxation, including higher corporate
taxes and fishing fees, while public spending is forecast to decline on the back of postponed public
construction projects and the streamlining of a number of state institutions.
The Central Bank of Iceland increased the key
interest rate (rate on seven-day term deposits) in
March to a new record high of 7.5%. However, real
interest rate remains negative due to high
inflation, which eased slightly to 9.9% year-on-
year in April after hitting a 13-year high of 10.2%
in February. The key drivers were housing costs,
and prices of food and fuel. Going forward,
inflation is projected to remain elevated in 2023
due to the expected increase in wages and a
somewhat weaker ISK as compared to 2022. Price
pressures are forecast to moderate in 2024 in line
with a cooling housing market and stabilising
commodity (oil and food) prices.
The balance of risks is tilted to the downside. Key risks stem from sluggish growth in main trading
partners and further wage increases, which could fuel a wage-price spiral.
-8
-6
-4
-2
0
2
4
6
8
15 16 17 18 19 20 21 22 23 24
Graph II.37.3: Iceland - Real GDP growth and contributions
Net exports Investment
Priv. consumption Gov. consumption
Inventories Real GDP (y-o-y%)
forecast
pps.
Table II.37.1:
2021 2022 2023 2024 2021 2022 2023 2024 2021 2022 2023 2024
4.3 6.4 2.2 2.4 3.9 3.3 1.7 1.9 4.2 2.1 0.8 1.5
7.0 8.6 2.2 2.5 4.4 6.8 0.3 2.4 1.6 4.0 1.5 1.0
2.4 1.6 1.9 1.8 5.0 0.1 0.5 1.0 3.5 -0.5 -0.5 -1.2
Gross fixed capital formation
9.8 6.9 2.0 3.3 -0.8 4.4 0.9 1.9 4.2 -0.8 1.6 1.8
Exports (good and services)
14.7 20.6 3.7 3.5 5.8 5.9 0.5 3.0 12.4 4.1 1.7 3.4
19.9 19.7 3.2 3.7 1.7 9.3 0.3 3.4 5.0 5.9 2.5 2.9
GNI (GDP deflator)
2.2 7.5 2.2 2.4 2.1 3.2 1.7 1.9 4.3 3.0 0.8 1.5
Contribution to GDP growth: Domestic demand
6.4 6.5 2.1 2.5 3.0 3.7 0.4 1.5 2.4 1.7 1.1 0.8
Inventories
-0.1 0.0 -0.1 0.0 -0.4 0.1 1.2 -0.1 -3.3 1.0 0.0 0.0
Net exports
-2.0 -0.1 0.2 -0.1 1.3 -0.2 0.2 0.4 5.1 -0.6 -0.3 0.7
Employment
1.4 7.5 2.0 1.2 1.3 3.9 0.5 0.3
-
0.6 1.5 0.8 1.0
Unemployment rate (a)
6.1 3.8 3.7 3.9 4.4 3.2 3.6 3.8 5.1 4.7 4.4 4.4
7.3 6.8 5.7 3.9 4.9 4.1 4.7 4.2 4.1 2.2 -0.3 0.8
4.2 7.8 5.5 2.7 2.2 4.7 3.4 2.6 0.4 1.6 -0.3 0.3
6.2 6.0 4.9 3.7 19.4 7.8 -0.3 0.6 : : : :
GDP deflator
6.6 9.0 6.6 3.5 17.1 28.0 -0.9 -1.0 1.1 2.7 1.7 0.9
4.4 8.3 6.5 3.7 3.5 5.8 4.8 3.0 0.6 2.8 2.2 1.3
6.1 7.6 0.2 0.0 59.6 61.1 -25.2 -7.3 2.0 0.0 0.1 0.0
-4.4 -5.7 -4.8 -5.3 12.3 28.2 17.5 15.4 13.7 11.6 11.1 11.6
Current account balance ©
-1.8 -0.3 0.2 0.1 13.5 28.9 18.2 16.2 7.1 7.3 7.0 7.7
-8.4 -4.3 -2.1 -1.6 10.6 26.0 22.9 21.9 -0.5 -0.1 0.2 0.7
75.6 68.7 65.2 63.2 42.5 28.7 19.8 11.8 27.9 26.4 25.6 24.3
Imports (goods and services)
Main features of country forecast - EFTA
Iceland
Norway
Switzerland
(Annual percentage change)
GDP
Private Consumption
Public Consumption
General government balance (c)
General government gross debt (c )
(a) as % of total labour force. (b) gross saving divided by adjustd gross disposable income. (c)as a % of GDP.
Compensation of employee/head
Unit labour cost whole economy
Saving rate of households (b)
National index of consumer prices
Terms of trade goods
Trade balance (goods) (c)
38. RUSSIAN FEDERATION
151
Ongoing fiscal support to cushion the economic fall in 2023
Russian real GDP contracted by 2.1% in 2022, reflecting the adverse economic impact of its war of
aggression against Ukraine and the international sanctions. The GDP fall was driven by a slump in
exports, de
and by a decrease in private consumption, amid declining real incomes and outward migration.
strictions. The main impetus
came from public consumption and investment boosted by demand from the military production
and logistics sectors as companies strived to establish new trading routes and supply chains.
Nominal wages are expected to outpace inflation in 2023 due to labour market pressures
stemming from partial mobilisation and outward migration. However, private consumption is set to
remain depressed, reflecting ongoing war-related uncertainty. Public funds are expected to
continue supporting new domestic production capacities to back import substitution policies,
additional infrastructure to facilitate a trade shift towards the east, and military production.
Nevertheless, investment activity is not expected to retain the pace of the previous year as projects
commenced before the war are coming to the completion phase and new private investment is
limited by declining profits, departure of Western companies and persisting uncertainty. The
ongoing fiscal stimulus is forecast to fully offset these negative developments, with domestic
demand having a neutral contribution to growth.
Russia coupled with its embargo on seaborne oil
and refined oil products, are expected to hinder
export recovery as Russia is unlikely to fully
replace lost markets. Imports are projected to
recover only gradually amid ongoing sanctions
and a weakening ruble reflecting deterioration of
the current account surplus on the back of easing
energy prices. Net exports are hence set to pose a
negative drag on growth. Overall, real GDP is
forecast to contract by 0.9% in 2023.
As the economy gradually adjusts to the
sanctions, a modest recovery of 1.3% is projected
in 2024. However, international isolation and the pivot towards a war economy are expected to
channel resources to less productive sectors, weighing negatively on future potential output.
Amid ongoing high war-related uncertainty, the balance of risks to the growth outlook is deemed
to be tilted to the downside. Significant negative risks stem from a possible new wave of
mobilisation, which could further exacerbate pressures on the labour market, and stronger
production in some sectors more than currently foreseen.
Inflation easing, but several upside risks remain
After a spike in April, inflation continued easing averaging 13.7% in 2022. This allowed the Central
Bank of Russia to reduce its benchmark rate from 20% to 7.5% in September. With the post-
invasion price shock moving into the baseline, inflation is forecast to decline to 6.4% in 2023 and
its war of aggression against Ukraine continue to bite. However, the ongoing fiscal stimulus, which
is expected to further deplete available fiscal buffers, should cushion the adverse economic
impact. A modest recovery is forecast in 2024, but the slide of the economy towards more
autarchy and war-
-10
-8
-6
-4
-2
0
2
4
6
8
10
15 16 17 18 19 20 21 22 23 24
Graph II.38.1: Russia - Real GDP growth and contributions
Net exports Investment Priv. consumption
Gov. consumption Inventories Real GDP (y-o-y%)
forecast
pps.
European Economic Forecast, Spring 2023
152
to drop further to 4.6% in 2024. Elevated inflation expectations and inflationary risks stemming
from high fiscal spending, deteriorating terms of trade amid a depreciating ruble, and wage
pressures reflecting a tight labour market are expected to limit the room for loosening monetary
policy despite the fragile economic outlook.
More spending and less revenue ahead
Despite the high surplus in the first half of 2022, the budget ended the year in a deficit of 2¼% of
GDP on the back of falling revenue and sustained high war-driven spending. Given the projected
slump in economic activity and depressed energy prices, the fiscal situation is not expected to
improve in the short term. Notwithstanding a continued rapid deterioration of the deficit in the first
quarter of 2023, which was largely driven by front-loaded expenditure, the deficit is set to remain
under control. Moreover, delinking the oil taxes from Urals prices, extracting high dividends from
state-owned enterprises, and levying additional taxes on large profitable businesses are expected
to alleviate the revenue shortfall. Despite these efforts, the deficit is forecast to exceed the annual
target and reach some 3% of GDP due to the ongoing spending pressures to finance military needs
and the restructuring of the economy.
With a modest recovery in 2024, the deficit is expected to decline to some 2½% of GDP. Given
rising financing costs of the debt, the government is likely to finance a part of the deficit from the
National Wealth Fund, like in 2022. This will limit the impact on public debt, which is expected to
reach 17% of GDP by 2024, compared to 14¾% in 2022.
bn RUB
Curr. prices % GDP 03-18 2019 2020 2021 2022 2023 2024
135295.0 100.0 3.2 2.2 -2.7 5.6 -2.1 -0.9 1.3
66597.3 49.2 5.1 3.7 -5.9 9.9 -1.4 -0.5 1.5
23445.8 17.3 0.9 2.4 1.9 2.9 2.8 2.6 1.0
26623.3 19.7 5.1 1.0 -4.0 9.1 3.3 -1.2 2.0
40446.3 29.9 4.4 0.7 -4.2 3.3 -13.9 -2.5 1.7
27955.8 20.7 6.8 3.1 -11.9 19.1 -15.0 2.8 2.9
132126.5 97.7 3.2 1.4 -1.8 5.6 -1.7 -1.1 1.3
3.9 2.5 -3.5 7.5 0.7 0.0 1.4
-0.1 0.3 -0.1 1.4 -1.8 0.2 0.0
-0.3 -0.4 1.3 -3.1 -1.1 -1.1 -0.1
0.5 -0.8 -1.9 1.3 0.4 -0.1 0.3
Unemployment rate (a)
6.4 4.6 5.8 4.8 3.9 3.7 4.0
: : : : : : :
: : : : : : :
: : : : : : :
11.1 3.3 0.9 19.0 15.8 3.1 4.4
9.0 4.5 3.4 6.7 13.7 6.4 4.6
2.3 -5.5 -22.9 35.2 27.1 -14.8 -1.9
10.2 9.8 6.2 10.3 13.6 9.3 8.9
5.3 3.9 2.4 6.7 10.4 5.3 4.8
1.8 3.0 -2.8 2.4 -2.2 -3.1 -2.6
: : : : : : :
13.5 13.7 19.2 16.5 14.7 15.9 17.0
GNI (GDP deflator)
Table II.38.1:
Main features of country forecast - RUSSIA
2021
Annual percentage change
GDP
Private Consumption
Public Consumption
Gross fixed capital formation
Exports (goods and services)
Imports (goods and services)
Contribution to GDP growth:
Domestic demand
Inventories
Net exports
General government balance (c)
Employment
Compensation of employees / head
Unit labour costs whole economy
Saving rate of households (b)
GDP deflator
Trade balance (goods) (c)
Current-account balance (c)
Consumer price index
Terms of trade goods
Structural budget balance (d)
General government gross debt (c)
(a) as % of total labour force. (b) gross saving divided by adjusted gross disposable income. (c) as a % of GDP. (d) as a % of potential GDP.
ACKNOWLEDGEMENTS
153
This report was prepared in the Directorate-General for Economic and Financial Affairs under the
direction of Maarten Verwey Director-General and Reinhard Felke
Directorate-General for Financial Stability, Financial Services and Capital Markets Union.
Executive responsibilities were attached to Laura Bardone
situation, foreca Reuben Borg
and Alexandru Zeana.
The Executive Summary was prepared by Laura Bardone and Kristian Orsini. In the section on
s prepared by Kristian Orsini.
Axioglou, Reuben Borg, Chris Bosma, Lucian Briciu, Christian Buelens, Alessandra Cepparulo, Cortes
Paya Paloma, Guillaume Cousin, Christian Gayer, Susanne Hoffmann, Aron Kiss, Anna Chiara Küffel,
Chapte -term projections of potential GDP growth in
Frattarolo, Adrian Ifrim, Philipp Pfeiffer, Josselin Roman, Beatrice Pataracchia, Marco Ratto, and
Factors Shape Growth and Inflation Going Forward? Model-
was prepared by Christos Axioglou, Roberta Cardani, Olga Croitorov, Lorenzo Frattarolo, Adrian
Linden and Ruben Kasdorp with input from Miguel Gil Tertre, Ignacio Martinez, Manuel Rivas, Bert
their role in
Kristian Orsini.
ared under the supervision of Isabel Grilo, Luc Tholoniat
Antonino Barbera Mazzola, Paolo Battaglia, Barbara Bernardi, Adrian Bodea, Joël Boulanger,
, Miriam Franzelin,
Carmine Gabriele, Hélène Gaston, Oscar Gómez Lacalle, András Hudecz, Zuzanna Iskierka, Dirk
Krastev, Jens Larsen, Anna Laudwein, Eduardo Llobell, Felix Lödl, Gonzalo López Molina, Ivan Lozev,
Simone Macchi, Nikolas Mayer, Natalie Lubenets, Ruslan Lukach, Mart Maiväli, Janis Malzubris,
Dorin Mantescu, Robert Markiewicz, Pascual Martinez Lamata, Fabrizio Melcarne, Laurent Moulin,
Balázs Pálvölgyi, Mona Papadakou, Alejandro Paz Otero, Gábor Márk Pellényi, Martin Pazicky, Arian
Michael Sket, Peeter Soidla, Gilles Thirion, Tsvetan Tsalinski, Daniel Vâlcu, Milda V
Vasiliki Vasilopoulou, Michael Vedsø, Alberto Vidan Bermudez, Martina von Terzi, Kai-Young
Weißschädel, Christos Zavos, Ingars Zustrups and Pieterjan van der Zwan.
- ed under the
-EU economies, benefited from
154
Bernhard Böhm, Costanza Caprini, Samir Chouman,
-Gheorghe Macovei, Maria Maierean, Alexandros Mouzakitis, Moisés
Orellana, José Ramón Perea
Sánchez Pareja, Uwe Stamm, Barbara Stearns-
Support in editing the report by Clara Gonzalez Zunzarren, and for its communication and
publication by Nicolas Carpentiers, Manuel De La Red Carino, Robert Gangl, Olivier Glorieux,
Susanne Krenzer, Tamas Nagy, Sarka Novotna, Yasmina Quertinmont, Lorenzo Rosati and Clara
Gonzalez Zunzarren under the responsibility of Matthieu Hebert, is gratefully acknowledged.
Follow-
Mc Morrow and Anna Thum-Thysen under the responsibility of Björn Döhring. Forecast assumptions
were prepared by Puck Boom, Paloma Cortés and Giulia Maravalli. Statistical support for the
production of the forecast was provided by Antonio Fuso, Daniel Grenouilleau, Anna Chiara Küffel,
Ingo Kuhnert, Cédric Viguié and Tomasz Zdrodowski. Further statistical and layout assistance was
Christos Zavos.
Valuable comments and suggestions by Gerrit Bethuyne, Stefan Ciobanu, Leonor Coutinho, Angela
Gabriele Giudice, Joern Griesse, Valeska Gronert, Martin Hallet, Renata Hruzova, Aron Kiss, Zenon
Kontolemis, Bettina Kromen, Robert Kuenzel, Stefan Kuhnert, Paul Kutos, Júlia Lendvai, Milan
Lisicky, Maarten Masselink, Gilles Mourre, Moisés Orellana, Lucia Piana, Dino Pinelli, Eric Ruscher,
Matteo Salto, Monika Sherwood, Dominique Simonis, Michael Sket, Uwe Stamm, Michael Stierle,
Andras Tari, Michael Thiel, Alessandro Turrini, Anneleen Vandeplas, Valerie Vandermeulen,
Charlotte Van Hooydonk, Florian Wöhlbier and Javier Yaniz Igal are gratefully acknowledged.
Secretarial support for the finalisation of this report was provided by Maria Symeonidou.
Comments on the report would be gratefully received and should be sent to:
Directorate-General for Economic and Financial Affairs
Unit A3: Economic situation, forecasts, business and consumer surveys
European Commission
B-1049 Brussels
E-mail: ecfin-forecasts@ec.europa.eu
Statistical Annex
European Economic Forecast – Spring 2023
Contents
156
Output : GDP and its components
1. Gross domestic product 158
2. Profiles (q-o-q) of quarterly GDP 158
3. Profiles (y-o-y) of quarterly GDP 159
4. GDP per capita 159
5. Final domestic demand 160
6. Final demand 160
7. Private consumption expenditure 161
8. Government consumption expenditure 161
9. Total investment 162
10. Investment in construction 162
11. Investment in equipment 163
12. Public investment 163
13. Potential GDP 164
14. Output gap relative to potential GDP 164
Prices
15. Deflator of GDP 165
16. Deflator of private consumption 165
17. a) Harmonised consumer prices index 166
17. b) All-items HICP, excluding energy and unprocessed food 166
18. Harmonised consumer prices quarterly profiles 167
19. Deflator of exports of goods 167
20. Deflator of imports of goods 168
21. Terms of trade of goods 168
Wages, population and labour market
22. Total population 169
23. Total employment in persons 169
24. Total employment in full-time equivalents (ES, FR, IT, NL, EA and EU) 170
25. Unemployment rate 170
26. Compensation of employees per head 171
27. Real compensation of employees per head 171
28. Labour productivity 172
29. Unit labour costs, whole economy 172
30. Real unit labour costs 173
Exchange rates
31. Nominal bilateral exchange rates 173
32. Nominal effective exchange rates 174
General Government
33. Total expenditure 174
Statistical Annex
157
34. Total revenue 175
35. Net lending (+) or net borrowing (-) 175
36. Interest expenditure 176
37. Primary balance 176
38. Cyclically-adjusted net lending (+) or net borrowing (-) 177
39. Cyclically-adjusted primary balance 177
40. Structural budget balance 178
41. Gross debt 178
Saving
42. Gross national saving 179
43. Gross saving of the private sector 179
44. Saving rate of households 180
45. Gross saving of general government 180
Trade and international payments
46. Exports of goods and services 181
47. Imports of goods and services 181
48. Merchandise trade balance (% of GDP) 182
49. Current-account balance (% of GDP) 182
50. Net lending (+) or net borrowing (-) 183
51. Current-account balance (bn EUR) 183
52. Export markets (goods and services) 184
53. Export performance (goods and services) 184
World economy
54. World GDP 185
55. World exports of goods and services 186
56. Export shares (goods) in EU trade 186
57. World imports of goods and services 187
58. Import shares (goods) in EU trade 187
59. World merchandise trade balances (bn USD) 188
60. World current-account balances (bn USD) 189
61. Crude oil prices 189
European Economic Forecast, Spring 2023
158
Table 1:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
2.5 0.7 1.7 2.3 -5.4 6.3
3.2 1.2 1.4
2.8 0.2 1.5
1.9 0.6 1.9 1.1 -3.7 2.6
1.8 0.2 1.4
1.6 -0.6 1.4
5.6 -0.4 3.5 3.7 -0.6 8.0
-1.3 -0.4 3.1
-0.1 0.7 2.1
3.6 -0.3 10.3 5.4 6.2 13.6
12.0 5.5 5.0
7.9 3.2 3.1
2.8 -5.9 0.5 1.9 -9.0 8.4
5.9 2.4 1.9
6.0 1.0 2.0
3.1 -1.8 2.7 2.0 -11.3 5.5
5.5 1.9 2.0
4.5 1.0 2.0
1.9 0.4 1.5 1.8 -7.8 6.8
2.6 0.7 1.4
2.6 0.4 1.5
4.1 -2.3 2.4 3.4 -8.5 13.1
6.2 1.6 2.3
6.0 1.0 1.7
0.9 -1.6 0.9 0.5 -9.0 7.0
3.7 1.2 1.1
3.8 0.3 1.1
4.7 -1.9 3.9 5.5 -4.4 6.6
5.6 2.3 2.7
5.6 1.0 1.9
Latvia
7.4 -1.7 3.1 2.6 -2.3 4.3
2.8 1.4 2.8
1.9 -0.3 2.6
7.1 -0.3 3.3 4.6 0.0 6.0
1.9 0.5 2.7
2.5 0.5 2.4
4.1 1.2 2.5 2.3 -0.8 5.1
1.5 1.6 2.4
1.5 1.0 2.4
2.9 2.9 7.5 7.0 -8.6 11.8
6.9 3.9 4.1
5.7 2.8 3.7
2.7 -0.4 2.2 2.0 -3.9 4.9
4.5 1.8 1.2
4.6 0.6 1.3
2.7 0.3 1.7 1.5 -6.5 4.6
5.0 0.4 1.6
4.6 0.3 1.1
1.4 -1.6 2.2 2.7 -8.3 5.5
6.7 2.4 1.8
6.6 0.7 1.7
7.3 1.1 3.3 2.5 -3.3 4.9
1.7 1.7 2.1
1.9 0.5 1.9
4.9 -1.9 3.5 3.5 -4.3 8.2
5.4 1.2 2.2
6.2 0.8 1.7
3.4 -1.0 1.5 1.2 -2.4 3.0
2.1 0.2 1.4
2.3 0.2 1.4
2.1 -0.4 1.9 1.6 -6.1 5.4
3.5 1.1 1.6
3.2 0.3 1.5
6.6 0.1 2.6 4.0 -4.0 7.6
3.4 1.5 2.4
3.1 1.1 2.4
5.3 -0.3 3.7 3.0 -5.5 3.6
2.5 0.2 2.6
2.5 0.1 1.8
1.9 -0.1 2.4 1.5 -2.0 4.9
3.8 0.3 1.5
3.0 0.0 1.3
2.9 -0.7 3.9 4.9 -4.5 7.2
4.6 0.5 2.8
5.5 0.1 2.6
5.2 2.6 4.4 4.5 -2.0 6.9
5.1 0.7 2.7
4.0 0.7 2.6
7.9 -0.6 4.9 3.9 -3.7 5.8
4.7 3.2 3.5
5.8 1.8 2.2
3.0 1.0 2.7 2.0 -2.2 5.4
2.6 -0.5 1.1
2.9 -0.6 0.8
2.3 -0.2 2.1 1.8 -5.6 5.4
3.5 1.0 1.7
3.3 0.3 1.6
1.9 0.4 2.4 1.6 -11.0 7.6
4.1 -0.2 1.0
4.2 -0.9 0.9
1.1 0.3 1.0 -0.4 -4.3 2.1
1.0 1.1 1.0
1.7 1.6 1.2
2.4 1.1 2.4 2.3 -2.8 5.9
2.1 1.4 1.0
1.8 0.7 1.7
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Gross domestic product, volume (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Incorrect slice name
Table 2:
28.04.2023
2022/1 2022/2 2022/3 2022/4 2023/1 2023/2 2023/3 2023/4 2024/1 2024/2 2024/3 2024/4
0.6 0.5 0.3 0.1 0.4 0.3 0.3 0.4 0.4 0.4 0.3 0.3
0.8 0.1 0.5 -0.4 0.0 0.3 0.3 0.3 0.4 0.4 0.4 0.4
-0.4 -1.2 -1.3 -1.6 0.6 0.7 0.8 0.6 0.8 0.8 0.7 1.3
7.2 2.3 2.8 0.3 -2.7 : : : : : : :
2.2 1.1 0.4 1.4 : : : : : : : :
0.0 2.2 0.2 0.2 0.5 0.2 0.4 0.4 0.5 0.6 0.6 0.5
-0.2 0.5 0.1 0.0 0.2 0.1 0.3 0.4 0.2 0.4 0.4 0.5
2.3 1.3 -0.5 0.6 0.3 0.5 0.5 0.7 0.4 0.7 0.7 0.6
0.1 1.0 0.4 -0.1 0.5 0.3 0.3 0.2 0.3 0.3 0.3 0.3
1.9 -0.2 1.6 1.1 : : : : : : : :
Latvia
1.5 -0.2 -1.2 1.2 0.5 0.5 0.6 0.6 0.7 0.7 0.8 0.8
0.2 -0.7 0.7 -0.5 0.1 0.4 0.5 0.6 0.7 0.8 0.8 0.8
0.5 -0.3 1.5 -3.8 3.1 1.1 1.1 0.8 0.4 0.4 0.4 0.5
1.0 1.1 1.4 1.2 : : : : : : : :
0.1 2.7 0.0 0.6 0.4 0.2 0.2 0.2 0.3 0.4 0.4 0.4
0.8 2.1 0.1 0.0 -0.3 0.0 0.2 0.3 0.4 0.5 0.6 0.6
2.3 0.2 0.3 0.3 1.6 0.1 0.3 0.4 0.5 0.5 0.5 0.5
0.2 0.2 0.3 0.3 0.3 0.5 0.8 0.9 0.3 0.3 0.4 0.6
1.0 0.8 -1.3 0.8 0.3 0.4 0.5 0.5 0.5 0.5 0.5 0.6
-0.1 1.0 -0.2 -0.4 0.0 0.1 0.3 0.4 0.4 0.4 0.4 0.4
0.6 0.9 0.4 -0.1 0.1 0.2 0.3 0.3 0.4 0.4 0.4 0.4
0.4 0.7 0.6 0.6 0.5 0.0 0.0 0.0 0.6 0.9 1.4 1.5
0.6 0.3 -0.3 -0.4 0.1 0.2 0.3 0.5 0.7 0.8 0.9 0.9
-0.4 1.3 0.1 0.6 -0.8 0.2 0.2 0.3 0.5 0.4 0.4 0.4
1.3 0.7 -0.7 -0.4 -0.5 1.1 1.0 0.6 0.6 0.7 0.8 0.8
4.2 -2.2 1.1 -2.4 : : : : : : : :
1.3 1.2 1.2 1.0 0.7 0.5 0.6 0.5 0.8 1.2 1.2 1.2
-0.3 0.3 0.4 -0.4 0.2 -1.1 0.0 0.6 0.3 0.3 0.5 0.4
0.7 0.7 0.4 -0.1 0.3 0.2 0.3 0.3 0.4 0.4 0.5 0.5
0.5 0.1 -0.1 0.1 0.1 -0.5 0.0 0.3 0.3 0.5 0.4 0.5
-0.5 1.2 -0.3 0.0 0.5 0.3 0.3 0.3 0.2 0.2 0.2 0.3
-0.4 -0.1 0.8 0.6 0.3 0.2 0.1 0.1 0.2 0.3 0.4 0.5
Japan
United States
Note: See note 10 for aggregation details for the EU and EA aggregates.
Hungary
Poland
Romania
Sweden
EU
United Kingdom
Denmark
Luxembourg
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Czechia
Bulgaria
Lithuania
Profiles (qoq) of quarterly GDP, volume (percentage change from previous quarter, 2022-24)
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Statistical Annex
159
Incorrect slice name
Table 3:
28.04.2023
2022/1 2022/2 2022/3 2022/4 2023/1 2023/2 2023/3 2023/4 2024/1 2024/2 2024/3 2024/4
5.4 4.1 2.1 1.5 1.3 1.1 1.1 1.4 1.3 1.4 1.4 1.3
3.5 1.7 1.4 0.9 0.2 0.3 0.1 0.8 1.2 1.3 1.5 1.6
3.3 -0.6 -2.4 -4.4 -3.4 -1.5 0.6 2.9 3.0 3.0 2.8 3.5
11.9 12.3 11.3 13.1 2.6 : : : : : : :
7.5 7.3 4.4 5.2 : : : : : : : :
6.9 7.8 4.7 2.6 3.1 1.0 1.2 1.3 1.4 1.9 2.2 2.4
4.7 4.2 1.0 0.4 0.8 0.4 0.6 1.0 1.1 1.4 1.6 1.6
7.5 8.4 5.4 3.7 1.6 0.8 1.8 1.9 2.0 2.3 2.4 2.3
6.5 5.1 2.5 1.4 1.8 1.0 1.0 1.2 1.1 1.1 1.1 1.2
6.7 6.1 5.3 4.5 : : : : : : : :
Latvia
6.0 3.3 0.8 1.2 0.3 0.9 2.8 2.2 2.4 2.7 2.8 3.1
4.5 2.2 1.4 -0.4 -0.5 0.6 0.4 1.5 2.2 2.6 2.9 3.1
2.7 2.2 3.7 -2.2 0.3 1.7 1.4 6.2 3.4 2.7 2.0 1.6
8.2 9.4 5.3 4.7 : : : : : : : :
6.1 5.2 3.4 3.5 3.7 1.2 1.4 0.9 0.8 1.1 1.3 1.5
8.6 6.5 2.2 3.0 1.8 -0.2 -0.1 0.2 0.9 1.4 1.9 2.3
11.9 7.4 4.8 3.2 2.4 2.3 2.3 2.3 1.3 1.7 1.9 2.1
3.0 1.5 1.2 1.0 1.2 1.4 1.9 2.5 2.5 2.3 2.0 1.6
9.6 8.3 3.9 1.3 0.6 0.3 2.1 1.9 2.1 2.2 2.2 2.3
3.5 3.0 1.7 0.3 0.4 -0.5 0.1 0.8 1.2 1.4 1.4 1.4
5.5 4.4 2.5 1.8 1.3 0.7 0.7 1.1 1.2 1.4 1.5 1.6
5.1 4.6 3.2 2.3 2.5 1.7 1.1 0.6 0.7 1.6 3.0 4.5
4.7 3.5 1.5 0.3 -0.3 -0.3 0.3 1.1 1.7 2.4 2.9 3.4
5.4 4.5 3.9 1.6 1.1 0.0 0.2 -0.1 1.3 1.5 1.6 1.7
7.9 6.1 3.8 0.9 -0.9 -0.5 1.3 2.3 3.3 2.8 2.5 2.7
10.7 5.9 4.8 0.6 : : : : : : : :
4.6 4.0 4.4 4.8 4.2 3.5 2.8 2.3 2.4 3.1 3.8 4.5
4.6 4.0 2.5 -0.1 0.4 -0.9 -1.3 -0.3 -0.1 1.3 1.8 1.6
5.7 4.4 2.6 1.7 1.3 0.6 0.6 1.1 1.3 1.5 1.6 1.7
10.6 3.8 2.0 0.6 0.2 -0.4 -0.4 -0.2 0.0 1.0 1.5 1.6
0.5 1.2 1.3 0.4 1.2 0.4 0.9 1.1 0.9 0.8 0.8 0.8
2.3 1.1 1.2 0.5 1.0 1.2 0.8 0.5 0.4 0.5 0.7 0.9
Japan
United States
Note: See note 10 for aggregation details for the EU and EA aggregates.
Hungary
Poland
Romania
Sweden
EU
United Kingdom
Denmark
Luxembourg
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Czechia
Bulgaria
Lithuania
Profile (yoy) of quarterly GDP, volume (percentage change from corresponding quarter in previous year, 2022-24)
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Table 4:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
1.9 -0.1 1.2 1.7 -5.8 5.8
2.4 0.6 1.0
2.1 -0.4 1.2
2.1 0.6 1.4 0.8 -3.8 2.6
1.1 -0.6 1.1
0.7 -1.1 1.3
6.1 -0.1 3.5 3.3 -0.9 7.9
-1.4 -2.3 3.0
-2.4 -0.2 2.2
1.2 -0.9 9.2 4.0 5.1 12.7
9.9 3.8 4.1
6.0 1.6 1.7
2.5 -5.7 0.9 2.0 -8.8 9.0
6.5 3.0 2.3
6.4 1.4 2.3
1.3 -2.0 2.6 1.2 -11.8 5.6
4.8 1.3 1.2
3.5 0.3 1.3
1.2 -0.1 1.0 1.4 -8.1 6.5
2.2 0.4 1.1
2.2 0.1 1.2
4.0 -2.0 3.2 4.0 -8.1 15.6
7.6 1.8 2.8
6.4 1.3 1.9
0.3 -1.9 1.1 0.7 -8.5 7.5
4.0 1.2 1.2
3.2 -0.2 1.2
2.8 -3.7 3.7 4.1 -5.4 5.6
4.2 1.0 1.7
3.6 -0.3 0.9
Latvia
8.5 -0.1 4.0 3.3 -1.7 5.3
2.6 1.9 3.5
1.6 0.2 3.4
8.5 1.3 4.4 4.9 0.0 5.5
1.0 0.2 3.1
1.9 0.2 3.1
2.4 -0.9 0.2 0.2 -2.3 3.5
-0.7 -0.9 0.4
-1.0 -1.3 0.4
2.4 2.0 4.7 2.9 -10.6 11.2
4.4 2.1 2.2
3.6 1.0 2.0
2.4 -0.8 1.7 1.3 -4.4 4.3
3.5 1.0 0.5
4.1 -0.2 0.5
2.2 -0.1 0.8 1.1 -6.9 4.2
3.8 0.1 1.4
3.4 -0.4 0.8
1.2 -1.4 2.5 2.7 -8.4 5.6
6.8 2.3 1.7
6.6 0.7 1.7
7.2 1.1 3.2 2.4 -3.5 5.2
0.6 1.3 2.1
0.8 0.0 1.9
4.6 -2.2 3.4 2.6 -4.9 8.0
5.3 1.0 2.0
6.2 0.6 1.5
3.0 -1.5 1.2 1.1 -2.5 2.8
1.8 -0.2 1.2
1.7 -0.1 1.3
1.6 -0.6 1.7 1.3 -6.2 5.3
3.0 0.6 1.3
2.5 -0.2 1.3
7.2 1.0 3.3 4.8 -3.4 8.5
4.2 1.0 3.0
3.8 1.7 3.0
4.8 -0.4 3.5 2.6 -5.8 3.6
2.5 -0.1 2.5
-0.2 -1.1 1.8
1.5 -0.6 1.8 1.1 -2.2 4.4
2.9 -0.3 1.1
2.3 -0.6 0.7
3.1 -0.4 4.2 4.9 -4.3 7.6
4.9 0.7 3.2
5.2 0.1 2.8
5.2 2.4 4.5 4.5 -1.9 7.5
6.1 -1.5 3.8
1.4 -0.4 2.8
9.0 -0.1 5.4 4.3 -3.1 6.6
5.2 3.2 3.9
6.6 2.6 3.1
2.4 0.2 1.6 1.0 -2.9 4.8
1.9 -1.2 0.4
2.5 -0.9 0.5
2.0 -0.4 2.0 1.6 -5.7 5.5
3.3 0.4 1.6
2.5 -0.2 1.4
1.2 -0.3 1.7 1.1 -11.4 7.2
3.4 -0.6 0.6
3.9 -1.2 0.6
1.1 0.4 1.1 -0.3 -4.0 2.3
1.5 1.6 1.5
2.2 2.2 1.8
1.5 0.3 1.6 1.8 -3.1 5.8
1.7 0.9 0.5
0.8 0.3 1.2
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Gross domestic product per capita (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
European Economic Forecast, Spring 2023
160
Table 5:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
2.8 0.7 2.0 1.9 -5.8 5.6
3.2 1.5 1.5
2.4 0.4 1.8
1.1 0.6 2.1 1.7 -3.0 1.9
3.1 -0.4 1.4
3.2 -0.7 1.5
6.2 -1.0 4.1 1.7 6.2 6.4
1.1 0.4 3.4
-1.5 0.5 1.9
4.1 -2.5 8.2 43.2 -10.9 -17.6
14.5 2.3 2.5
3.5 1.5 2.3
3.0 -7.7 0.7 1.1 -3.4 7.2
8.2 1.8 1.4
5.2 0.8 1.5
3.6 -3.5 2.9 1.7 -9.4 5.3
3.1 1.4 2.3
1.5 1.0 1.8
2.3 0.4 1.6 2.1 -6.6 6.6
3.2 0.6 1.4
2.8 0.3 1.6
4.6 -3.7 2.4 3.4 -3.1 6.1
6.3 1.6 2.1
5.1 1.3 1.8
0.7 -2.3 1.2 -0.2 -8.4 7.0
4.3 0.7 0.8
4.5 0.3 1.0
7.2 -4.6 4.3 6.1 -3.7 3.0
9.8 1.7 2.0
3.7 0.5 1.4
Latvia
8.3 -3.2 3.0 3.2 -2.3 9.8
4.6 1.1 2.6
3.7 -0.5 2.2
9.4 -3.4 3.7 1.5 -3.7 6.9
1.7 0.6 2.7
1.7 -0.2 2.2
3.0 2.0 2.5 4.1 -2.8 8.2
2.0 1.3 2.3
2.2 2.1 2.7
2.7 1.0 6.2 8.2 -3.5 7.9
13.0 1.5 3.7
3.8 2.2 3.3
2.3 -1.0 2.1 3.0 -4.2 3.9
4.0 1.9 1.3
3.9 1.0 1.1
2.1 0.3 1.8 0.4 -5.6 6.6
2.1 0.6 1.4
2.5 0.2 1.2
1.8 -3.3 2.6 3.1 -5.4 5.7
4.5 1.4 1.9
4.5 1.3 2.1
6.9 -1.2 3.8 3.9 -5.0 5.8
3.3 2.5 1.5
2.7 0.5 1.7
4.7 -3.5 3.0 3.5 -4.7 9.9
8.0 1.3 2.3
7.5 -0.1 1.6
3.1 -0.2 1.8 -0.4 -1.7 3.0
4.9 -1.1 0.8
2.6 0.4 1.2
2.0 -0.9 2.1 2.4 -5.8 4.2
3.8 0.6 1.5
3.2 0.2 1.5
9.4 -2.8 2.9 4.8 0.1 7.5
4.6 1.7 2.2
6.0 1.9 2.5
4.0 -1.2 3.8 3.2 -5.5 7.7
2.4 -0.2 2.4
2.5 0.0 1.7
2.9 -0.6 2.6 0.5 -0.1 4.6
1.0 -1.1 1.0
1.4 -1.1 1.1
1.6 -2.2 4.4 7.2 -2.6 6.3
3.9 -0.7 2.0
6.1 -1.1 1.8
6.1 1.3 4.7 3.3 -2.7 8.5
5.1 -0.8 2.3
5.3 -0.1 2.3
11.9 -2.7 5.9 5.3 -2.1 7.0
5.2 3.7 3.8
6.3 1.9 2.5
2.8 1.2 3.1 0.2 -2.3 5.7
3.4 -2.1 0.5
4.4 -1.1 0.0
2.3 -0.8 2.3 2.5 -5.3 4.6
3.8 0.5 1.5
3.3 0.1 1.5
1.8 0.6 2.6 1.8 -12.3 9.0
4.3 -0.9 0.6
6.5 -1.8 0.7
0.5 0.7 0.7 0.0 -3.4 1.1
1.6 1.1 0.8
2.2 1.4 0.9
2.2 0.9 2.6 2.3 -2.5 7.0
2.4 0.7 0.8
2.1 0.2 1.3
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Domestic demand, volume (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 6:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
3.7 0.6 3.0 2.1 -5.5 8.1
4.1 1.4 2.0
3.2 0.9 2.5
3.1 1.1 2.7 1.6 -5.1 4.4
3.0 0.3 2.0
2.6 -0.2 2.0
8.2 1.9 3.5 3.6 1.2 11.9
2.8 0.6 3.2
1.4 1.0 2.7
4.3 0.4 12.2 23.4 1.7 2.1
14.8 5.3 4.6
8.6 3.7 3.6
3.8 -6.6 2.0 2.2 -8.5 11.1
7.3 3.3 2.6
7.2 1.8 2.5
3.6 -2.3 3.2 1.8 -12.2 7.4
6.1 2.2 2.6
5.6 1.5 2.7
2.6 0.6 2.1 2.0 -9.0 7.1
4.1 1.5 2.0
3.9 1.0 2.4
4.6 -2.9 3.8 4.5 -9.8 14.5
12.7 2.1 2.7
12.1 1.5 2.3
1.4 -1.8 1.7 0.2 -9.7 8.7
5.6 1.1 1.4
6.1 0.8 1.8
5.6 -2.5 5.8 7.2 -1.1 7.7
11.6 2.2 2.8
5.7 1.0 1.8
Latvia
9.2 -1.0 3.7 2.8 -1.6 8.3
6.3 1.6 2.6
5.2 -0.1 2.5
9.9 0.3 4.2 5.2 -1.9 11.4
6.4 1.2 3.7
4.2 0.3 3.7
5.3 2.6 3.6 4.4 -0.6 9.3
0.0 2.3 3.3
2.6 1.5 3.5
6.6 2.7 8.0 9.5 -2.3 6.8
8.6 2.9 3.3
6.0 2.8 3.7
3.6 0.4 3.4 2.5 -4.3 4.5
4.3 2.9 1.5
4.2 1.2 1.4
3.5 0.5 2.5 1.7 -7.5 7.6
5.4 1.0 1.8
5.4 0.6 1.1
2.3 -1.8 3.5 3.4 -9.4 7.7
8.0 2.7 2.3
7.9 1.7 2.2
10.0 1.5 4.3 2.4 -5.6 8.2
2.8 2.9 3.6
0.6 1.1 2.4
7.1 -1.9 4.7 4.0 -6.6 12.0
7.3 2.0 3.1
7.3 1.6 2.6
4.7 -1.0 2.0 1.5 -3.4 3.8
4.0 -0.3 1.6
2.3 0.9 2.0
3.0 -0.2 2.9 2.6 -6.8 6.3
4.9 1.5 2.1
4.3 0.8 2.2
10.1 -0.5 3.7 4.5 -4.1 8.8
6.0 2.1 2.6
6.4 1.7 2.8
8.0 0.7 4.8 2.4 -6.6 7.3
3.8 2.0 3.3
3.4 1.1 2.7
3.8 -0.2 3.0 2.0 -2.5 5.9
4.0 -0.2 1.2
3.0 0.9 2.6
6.7 -0.5 5.3 6.3 -4.2 7.4
7.5 1.3 3.1
6.3 1.0 3.2
6.9 2.2 5.6 4.0 -2.1 9.9
5.5 0.4 2.8
4.9 1.0 3.2
12.3 -0.2 6.6 5.3 -4.1 8.5
6.4 3.8 4.1
6.8 2.3 3.2
4.0 0.9 3.4 2.0 -3.3 7.1
4.4 -0.7 1.2
4.3 -0.7 1.0
3.4 -0.1 3.1 2.7 -6.4 6.5
4.9 1.4 2.2
4.4 0.8 2.3
2.4 0.7 2.8 1.9 -12.3 7.3
5.6 -1.7 0.5
6.6 -1.0 1.0
1.5 0.4 1.3 -0.2 -4.7 2.5
2.1 1.7 1.2
2.5 1.7 1.2
2.7 1.2 2.6 2.1 -3.7 6.9
2.8 1.0 1.0
2.6 0.5 1.7
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Final demand, volume (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Statistical Annex
161
Table 7:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
1.5 1.5 1.5 1.7 -8.3 5.5
4.1 2.6 1.7
3.7 1.1 2.5
0.6 0.9 1.7 1.6 -5.7 0.4
4.3 0.0 1.8
4.5 -0.9 1.5
6.8 -1.1 4.0 4.6 -1.0 6.4
2.3 0.3 4.2
4.0 0.9 2.8
4.8 -1.4 3.3 2.5 -11.9 4.7
6.6 4.1 3.9
5.3 1.3 2.6
3.5 -5.6 0.6 1.9 -7.7 5.8
7.8 1.6 1.4
5.8 1.0 1.5
3.0 -2.4 2.4 1.1 -12.2 6.0
4.4 0.9 2.3
1.5 0.6 1.6
1.9 0.6 1.3 1.8 -6.7 5.3
2.9 0.1 1.5
2.5 0.7 1.6
3.7 -2.7 1.5 4.1 -5.1 9.9
5.1 1.2 1.8
4.6 0.4 1.2
0.7 -1.3 1.1 0.2 -10.4 4.7
4.6 0.1 1.2
3.7 0.1 1.0
6.6 -2.6 3.6 3.9 -6.8 4.5
7.7 1.9 2.2
4.9 1.2 1.3
Latvia
8.0 -0.7 2.4 0.2 -4.6 8.1
8.1 3.0 2.8
6.0 -1.6 2.2
9.5 -2.1 3.8 2.7 -2.4 8.0
0.5 0.1 3.1
1.2 -0.8 2.4
1.9 2.1 3.0 2.3 -7.3 9.5
2.8 2.4 2.7
2.6 1.7 2.7
2.2 2.0 4.7 4.0 -10.5 8.1
10.1 3.8 4.0
7.0 3.7 4.0
0.9 -0.8 1.6 0.9 -6.4 3.6
6.5 2.1 1.2
5.8 0.2 1.1
1.7 0.7 1.1 0.5 -8.0 3.6
4.1 1.4 2.1
4.2 -0.5 1.2
1.9 -2.0 2.3 3.3 -7.0 4.7
5.8 0.5 1.5
5.4 0.5 1.6
6.6 -0.4 3.4 2.7 -1.1 2.6
5.5 0.6 0.8
4.2 -1.5 1.8
3.0 -0.5 2.7 5.3 -6.9 9.5
8.9 1.7 1.9
8.1 -0.3 1.6
3.3 0.5 1.4 0.7 -3.8 3.6
2.1 0.1 1.2
2.5 0.2 1.3
1.6 -0.4 1.6 1.4 -7.7 3.7
4.3 0.6 1.7
3.7 0.1 1.5
8.0 -0.1 2.5 6.0 -0.6 8.8
4.8 3.6 1.5
3.0 0.6 1.5
3.5 0.2 3.3 2.7 -7.2 4.1
-0.9 -2.2 3.3
0.8 0.2 2.3
2.7 -0.3 2.3 1.6 -1.4 4.2
-2.3 0.1 1.3
-1.5 -0.6 1.7
1.2 -1.9 4.2 5.0 -1.2 4.6
6.4 -0.7 2.8
7.2 -1.5 2.6
4.6 1.9 4.3 3.4 -3.4 6.1
3.3 -0.1 2.7
4.2 2.3 2.4
11.9 -2.1 7.4 3.4 -3.9 8.1
5.5 3.8 3.2
6.7 1.1 1.6
2.7 1.9 2.7 0.7 -3.2 6.3
2.1 -1.7 1.2
4.0 -1.0 -0.2
1.9 -0.3 1.9 1.5 -7.1 4.0
4.0 0.5 1.8
3.7 0.1 1.5
1.8 0.6 2.8 1.1 -13.2 6.2
5.6 -0.5 0.4
5.0 -0.8 1.2
0.7 1.1 -0.1 -0.6 -4.7 0.4
2.1 1.0 0.8
3.3 1.5 0.8
2.5 1.0 2.7 2.0 -3.0 8.3
2.7 1.8 0.5
2.6 0.7 0.9
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Private consumption expenditure, volume (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 8:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
1.7 0.8 0.8 2.3 0.1 5.0
3.2 0.7 0.7
1.1 -0.4 -0.4
1.3 1.6 2.2 2.6 4.0 3.8
1.2 -0.3 1.4
2.2 -0.6 1.0
4.2 0.9 2.0 3.1 2.8 4.0
-0.3 4.3 0.7
0.6 5.0 -0.5
3.6 -2.8 4.0 6.5 10.5 6.1
1.6 0.3 -0.5
2.0 -0.7 2.9
3.6 -4.1 -0.7 2.1 2.6 2.2
-1.6 -0.2 -1.4
0.6 -3.7 0.8
5.8 -0.1 1.1 1.9 3.5 2.9
-0.7 1.7 0.6
-1.6 1.0 1.0
1.5 1.6 1.2 1.0 -4.0 6.4
2.6 1.1 0.9
2.4 1.0 0.8
3.6 0.6 1.1 3.1 4.3 3.0
3.2 3.1 2.5
2.4 2.1 2.3
0.5 -0.9 -0.1 -0.6 0.0 1.5
0.0 0.4 -1.3
0.0 -0.3 -0.5
3.4 0.2 -0.2 12.0 11.5 9.0
0.1 1.7 1.6
2.8 -0.3 0.6
Latvia
3.4 -2.8 2.7 3.9 2.4 4.4
2.8 0.9 1.3
2.1 1.5 1.5
2.4 -0.6 0.1 -0.3 -1.4 0.9
0.5 0.5 0.2
0.7 0.8 -0.1
2.0 3.8 2.7 2.6 7.8 5.4
3.8 3.7 2.3
3.4 4.2 3.0
3.2 0.9 3.8 13.2 15.8 6.9
2.4 5.0 3.3
6.8 -2.6 1.8
3.0 0.8 0.9 2.8 1.6 5.2
1.5 2.3 1.4
1.3 2.7 1.2
2.4 0.7 1.1 1.3 -0.5 7.8
2.9 -0.4 0.3
2.4 0.6 1.0
1.3 -1.7 0.4 2.1 0.3 4.6
1.7 2.7 1.3
1.8 2.1 1.9
3.0 1.0 2.5 4.5 -0.6 4.2
-4.3 2.9 1.3
-0.9 -0.4 -0.1
3.3 -0.5 1.6 1.8 4.1 5.8
0.9 0.6 1.8
0.6 1.3 0.6
1.5 0.6 0.8 2.0 1.2 3.9
2.9 1.3 0.2
1.1 0.1 0.4
1.9 0.6 1.2 1.7 1.0 4.3
1.3 0.7 0.7
1.4 0.3 0.8
2.4 -0.6 2.7 2.0 8.3 0.4
6.5 3.9 4.0
8.4 3.6 2.7
0.4 0.1 2.2 2.5 4.2 1.4
0.6 1.7 1.5
0.2 0.9 1.3
1.9 0.9 0.9 0.8 -1.4 4.2
-3.5 -0.1 1.1
0.9 -0.6 1.4
0.7 0.5 2.5 5.9 -0.5 1.7
0.8 0.0 0.9
0.8 0.0 0.9
4.0 1.3 2.9 6.5 4.9 5.0
-2.0 0.5 2.7
0.2 0.6 0.9
2.7 -0.3 2.0 7.2 1.1 1.3
4.3 -0.9 3.1
0.3 0.8 2.5
0.7 1.4 1.6 0.3 -1.8 2.8
0.0 0.7 0.1
0.1 0.2 0.1
1.9 0.6 1.3 1.9 1.0 4.2
1.1 0.7 0.8
1.3 0.3 0.8
2.4 0.6 1.0 4.1 -7.3 12.5
1.8 2.1 1.8
1.0 1.4 1.1
0.7 1.8 1.1 1.9 2.4 3.5
1.5 0.5 0.4
2.0 1.3 0.8
1.5 -0.5 0.8 3.4 2.2 1.3
-0.2 1.8 0.6
-0.4 0.9 0.5
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Government consumption expenditure, volume (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
European Economic Forecast, Spring 2023
162
Table 9:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
5.1 -0.7 3.5 5.0 -5.3 5.1
-0.8 0.7 2.0
-0.5 0.6 2.5
2.6 0.2 3.0 1.9 -2.3 1.2
0.4 -0.7 2.0
0.3 -0.6 2.3
7.5 -1.1 4.5 -3.7 24.7 2.8
-10.9 1.8 4.2
-15.0 2.0 3.8
4.0 -4.7 19.6 100.9 -16.5 -39.0
25.9 1.8 2.8
2.7 2.9 1.9
3.1 -17.6 0.6 -2.2 1.1 20.0
11.7 7.2 6.0
11.5 6.3 3.5
3.6 -8.4 4.9 4.5 -9.7 0.9
4.6 2.2 4.2
4.8 1.9 3.0
3.3 -1.2 2.3 4.0 -8.2 11.5
2.2 1.2 1.7
2.2 -0.9 2.4
5.9 -7.4 3.2 9.0 -5.0 4.7
5.8 2.9 3.7
9.4 2.9 3.2
0.8 -5.6 1.9 1.2 -7.9 18.6
9.4 2.6 1.4
9.5 1.9 2.3
9.7 -12.6 9.4 6.9 4.5 -4.2
6.6 0.8 1.7
0.7 -0.7 2.1
Latvia
14.3 -5.8 1.5 6.9 -2.6 2.9
0.7 1.7 4.0
-0.2 0.9 3.1
12.6 -4.5 6.5 6.6 -0.2 7.8
2.6 2.7 4.5
1.3 0.5 4.0
5.7 0.9 0.0 9.1 -3.6 6.7
-0.5 -2.9 1.6
0.4 0.8 2.5
3.4 0.1 12.1 11.8 -6.6 10.9
30.4 -5.0 3.5
-5.0 4.0 3.5
4.3 -3.8 4.7 6.2 -2.6 3.2
2.5 1.7 1.1
3.2 0.6 0.9
1.7 -0.2 2.9 4.5 -5.3 8.7
-0.9 0.0 1.1
-0.6 1.2 1.6
0.6 -8.7 5.6 5.4 -2.2 8.7
3.0 2.9 3.6
4.0 3.5 3.6
8.6 -2.0 3.7 6.7 -10.9 3.5
5.9 9.0 3.7
3.5 7.5 3.6
7.6 -9.5 2.9 5.1 -7.9 13.7
7.8 3.9 3.8
4.4 -0.6 2.5
4.0 -2.3 3.1 -1.5 -1.0 0.9
5.0 -0.1 0.4
3.4 0.8 1.6
2.9 -3.2 3.4 6.9 -6.2 3.9
3.7 1.0 2.1
2.8 0.5 2.3
17.6 -7.9 1.5 4.5 0.6 -8.3
-4.3 2.2 3.3
-8.0 5.5 7.0
6.1 -2.7 4.9 5.9 -6.0 0.8
6.2 2.8 2.7
5.3 2.0 1.3
4.1 -2.6 4.9 -1.3 5.1 6.2
8.6 -3.5 -0.3
4.5 -2.1 0.0
3.6 -2.9 7.9 12.8 -7.1 6.5
1.2 -2.9 1.5
5.0 -1.6 1.2
11.6 0.4 4.8 6.2 -2.3 1.2
5.0 2.0 3.1
3.7 2.5 4.3
22.4 -7.4 3.2 12.6 1.1 1.9
8.0 7.0 8.0
4.7 5.6 5.9
5.6 -0.5 4.8 -0.3 1.7 6.0
5.2 -3.2 -0.2
5.3 -2.0 0.2
3.6 -3.0 3.6 6.5 -5.4 3.8
4.0 0.9 2.1
3.0 0.5 2.3
1.8 -1.0 4.2 1.9 -10.5 6.1
8.6 -2.1 0.2
3.7 -2.1 2.3
-0.5 -0.6 1.6 0.5 -3.6 -0.1
-1.1 1.9 1.2
-1.3 1.5 1.3
1.9 0.7 3.9 2.6 -1.2 5.7
-0.5 -1.1 2.5
-0.4 -0.5 2.7
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Total investment, volume (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 10:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
4.9 0.4 2.6 4.0 -5.8 5.0
-0.8 -0.8 1.7
1.8 0.4 2.0
-0.8 1.3 1.6 1.0 3.9 0.0
-1.7 -3.6 0.7
-1.3 -1.8 1.7
10.1 -2.9 4.5 -2.2 4.3 -5.3
2.9 2.1 3.5
-0.3 2.1 3.6
3.2 -14.6 9.9 5.6 -10.0 -2.3
10.2 -1.8 2.5
16.4 7.4 6.8
0.5 -18.0 -6.4 -14.6 4.5 15.1
25.7 12.0 6.3
15.5 7.2 2.5
2.5 -11.7 4.4 7.2 -10.2 -3.7
4.7 2.3 3.9
4.2 2.9 3.2
3.0 -1.9 0.9 4.4 -11.5 13.5
0.1 -0.7 0.6
0.6 -0.5 2.0
2.4 -6.0 0.2 9.6 -4.3 2.7
2.6 3.0 3.1
3.6 3.0 3.1
0.2 -7.1 -1.0 2.4 -6.5 27.7
11.6 1.0 1.0
11.3 2.3 2.3
9.6 -15.1 8.8 16.6 -1.5 5.5
0.9 -0.5 0.6
-4.6 -4.9 0.0
Latvia
12.3 -4.6 1.0 1.2 -6.9 -6.6
-11.1 1.0 2.6
-0.6 -0.4 2.6
11.9 -7.1 4.4 9.8 0.2 1.1
3.4 1.1 3.5
4.5 0.1 3.5
3.2 -1.0 1.6 9.2 -5.0 2.9
3.0 -2.0 1.4
1.0 2.0 3.2
0.2 -3.1 10.1 19.5 -2.3 3.6
-6.7 2.0 3.0
-1.2 1.7 3.0
3.8 -7.4 7.1 5.4 0.4 1.7
1.9 1.2 1.3
3.5 1.0 1.3
0.4 -2.0 1.8 3.6 -3.4 5.8
-1.0 -0.9 -0.6
0.0 0.8 1.3
-2.4 -10.8 3.4 7.5 0.7 5.8
0.9 2.1 2.8
3.4 3.3 3.1
9.8 -3.5 1.5 -2.2 4.1 1.3
2.6 5.9 3.6
1.3 10.0 6.2
6.7 -14.4 1.6 6.7 -4.6 6.2
10.6 6.5 4.8
5.1 1.8 3.9
4.3 -1.6 3.5 -1.4 -0.6 -1.5
5.3 -2.0 -1.2
3.5 0.3 0.5
1.6 -4.4 1.9 3.3 -4.0 6.4
2.0 -0.8 1.2
2.4 0.4 2.1
25.0 -7.4 -2.6 -5.9 -0.1 -12.5
-5.1 2.5 1.9
-9.4 5.2 6.9
2.6 -3.3 3.1 5.1 -1.8 -2.6
3.9 2.1 5.4
6.0 3.1 2.4
2.4 -4.5 5.3 2.7 4.7 8.9
8.2 -5.2 -3.6
7.5 -6.4 -1.4
1.5 -5.2 7.5 13.8 -4.2 0.9
7.4 -1.9 -1.1
2.8 -1.1 -0.6
10.0 1.8 3.0 7.6 -3.3 4.5
1.8 -2.0 1.8
5.2 0.4 1.8
26.3 -8.9 8.6 11.9 11.4 3.7
11.1 6.3 6.8
5.6 6.2 6.7
5.2 -1.8 6.6 0.0 0.9 -1.1
2.7 -9.3 -3.8
4.6 -5.3 -3.8
2.2 -4.3 2.3 3.6 -3.3 5.8
2.5 -1.0 1.2
2.8 0.2 1.9
0.3 -1.5 5.1 5.6 -13.4 7.3
7.1 -2.1 -0.1
3.3 -2.4 2.0
-4.2 0.1 0.8 0.6 -2.6 -2.4
-4.8 1.2 1.2
-5.0 1.2 1.2
-2.0 -3.1 3.4 0.8 -0.4 1.5
-8.5 -4.5 2.3
-8.9 -4.7 2.8
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Investment in construction, volume (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Statistical Annex
163
Table 11:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
5.8 -3.9 4.2 5.0 -8.8 6.9
-0.6 2.1 2.7
-3.0 0.6 3.2
6.6 -1.9 4.1 1.0 -11.0 3.5
3.3 2.6 3.7
2.2 -0.2 3.2
3.4 0.3 3.1 -6.7 -7.4 28.2
4.2 2.0 5.3
2.0 2.4 3.9
6.2 4.6 14.5 -2.3 -29.1 26.6
24.3 0.0 0.8
21.2 3.4 3.5
7.0 -21.8 10.0 2.5 -4.2 33.2
5.1 5.2 7.2
13.4 9.5 4.5
5.6 -6.2 6.0 2.0 -13.3 6.3
4.0 1.8 5.3
5.6 1.0 2.9
3.1 -2.3 3.8 3.0 -11.4 11.0
0.9 2.1 2.5
2.4 -5.1 3.9
10.4 -9.6 6.0 10.4 -7.9 8.8
12.5 2.8 4.8
19.3 2.9 3.5
1.8 -5.9 5.2 -0.8 -13.0 16.2
8.6 4.4 1.7
9.6 1.4 1.7
10.3 -13.2 9.1 -7.6 14.4 -30.7
4.8 5.6 6.4
18.0 9.0 8.0
Latvia
18.2 -9.6 1.9 14.5 -1.0 12.9
9.0 2.0 5.5
-0.1 2.4 4.0
12.1 -1.1 9.0 3.5 -2.9 22.7
1.9 6.2 5.9
-3.4 0.9 4.4
11.2 3.9 -4.5 14.8 -1.5 11.0
-8.8 -6.7 1.9
-1.0 -1.9 1.1
5.8 2.6 9.4 4.7 -23.2 34.4
123.0 : :
: : :
5.1 -3.4 4.5 7.9 -11.1 4.8
1.1 2.4 0.7
2.1 -0.4 0.1
2.6 -0.8 4.0 1.6 -9.5 16.0
-4.5 0.8 3.0
-4.7 0.8 1.6
5.4 -9.0 10.6 1.8 -11.1 11.9
6.2 4.2 4.7
4.5 2.9 3.8
7.3 -1.1 5.8 13.9 -24.6 8.9
6.6 11.8 3.8
2.3 5.3 1.7
8.8 -6.5 4.9 1.9 -12.1 22.4
6.4 -0.5 3.7
8.6 -1.7 3.1
4.6 -2.8 5.2 -4.4 -1.0 3.9
2.8 2.5 4.1
3.6 1.0 3.0
4.8 -3.7 4.9 1.9 -11.8 9.2
4.0 2.5 2.9
3.9 -0.3 2.7
12.8 -10.0 3.9 15.1 3.3 -3.6
-4.4 2.3 4.3
-7.8 5.9 7.8
9.5 -2.9 4.8 2.6 -11.5 4.7
8.3 4.1 0.5
6.3 1.7 0.3
5.1 -1.8 4.0 -9.7 1.8 9.6
-4.6 -1.0 4.3
-3.8 0.6 0.9
5.0 -1.8 10.6 12.4 -9.3 10.4
-4.7 -3.8 3.9
8.5 -1.9 2.6
14.3 -1.7 6.7 3.5 -4.7 -3.1
10.9 6.1 5.1
1.2 5.4 6.9
18.9 -5.4 -3.4 5.3 -10.2 0.2
3.1 9.0 11.6
3.5 4.6 4.7
7.9 0.1 3.0 1.1 -6.3 13.7
4.5 -0.2 1.5
1.5 -1.6 3.8
5.6 -3.5 4.8 2.0 -10.9 8.5
4.0 2.5 3.1
3.7 0.1 2.9
3.3 -3.1 3.3 0.4 -13.7 5.6
19.5 -5.1 0.6
5.9 -1.4 2.6
3.8 -1.5 3.2 0.9 -6.1 3.5
0.9 2.7 1.5
-0.6 1.2 1.2
5.8 3.7 3.3 1.8 -8.7 8.7
3.2 -0.2 2.1
3.6 2.4 2.6
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Investment in equipment, volume (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 12:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
2.0 2.3 2.5 2.6 2.7 2.7
2.7 2.9 3.1
2.9 3.0 3.0
2.0 2.3 2.2 2.4 2.7 2.6
2.6 2.7 2.9
2.7 2.8 2.8
5.3 5.6 5.2 5.0 5.7 5.6
5.2 5.0 4.8
5.4 5.9 6.1
4.2 2.7 2.0 2.3 2.3 2.0
2.0 2.0 2.0
2.1 2.1 2.3
5.3 3.6 3.8 2.5 3.1 3.6
3.5 3.9 4.6
4.9 4.3 4.2
4.4 3.8 2.2 2.2 2.6 2.7
2.8 2.9 2.9
2.8 2.9 2.9
4.0 4.1 3.4 3.7 3.7 3.6
3.7 3.7 3.8
3.7 3.7 3.6
5.7 4.2 3.3 4.3 5.5 4.7
3.8 4.7 4.6
4.4 4.9 5.4
3.2 3.0 2.3 2.3 2.6 2.9
2.7 3.1 3.5
2.6 3.1 3.3
3.5 3.5 2.8 2.5 2.8 2.7
2.6 3.0 2.8
2.7 2.9 2.7
Latvia
4.7 5.0 4.6 5.1 5.7 5.2
3.8 5.5 6.1
5.0 5.3 5.5
4.5 4.4 3.3 3.1 4.4 3.1
3.0 3.6 3.6
2.9 3.6 3.6
4.3 4.1 3.9 4.1 4.7 4.1
4.1 4.3 4.3
4.2 4.4 4.3
3.7 2.7 3.2 3.8 4.2 3.8
3.3 3.8 3.1
3.9 3.9 3.1
3.9 4.0 3.5 3.4 3.7 3.4
3.2 3.3 3.3
3.4 3.6 3.6
2.9 3.1 3.0 3.1 3.3 3.6
3.3 3.4 3.3
3.3 3.3 3.4
3.8 3.5 1.9 1.8 2.3 2.6
2.5 3.1 3.2
2.6 3.0 3.1
3.4 3.6 4.2 3.6 3.4 3.1
3.3 4.9 4.1
3.5 4.6 4.6
4.3 4.5 3.9 3.8 4.1 4.7
5.2 6.1 5.0
5.8 6.4 5.6
3.6 3.9 4.1 4.4 4.8 4.2
4.1 4.5 4.4
4.3 4.4 4.3
3.3 3.2 2.7 2.8 3.0 3.0
3.0 3.2 3.3
3.1 3.2 3.2
4.4 4.1 4.0 3.3 3.3 2.6
3.0 3.8 3.0
2.9 3.7 4.3
5.1 4.7 4.0 4.4 4.8 4.7
4.6 4.7 4.3
4.7 5.0 4.2
2.9 3.4 3.6 3.2 3.6 3.4
3.1 3.3 3.2
3.4 3.5 3.5
4.1 3.7 5.1 6.3 6.5 6.3
5.3 5.3 5.1
5.5 5.3 5.3
3.8 5.2 4.2 4.3 4.5 4.1
4.0 4.1 4.2
4.1 4.5 4.6
4.7 5.1 3.7 3.5 4.6 4.2
4.2 5.2 4.4
5.3 6.1 6.0
4.1 4.4 4.5 4.9 5.0 4.8
4.9 4.9 4.8
4.8 4.9 4.9
3.4 3.4 2.9 3.0 3.3 3.2
3.2 3.4 3.4
3.3 3.4 3.5
2.7 2.9 2.7 2.8 3.1 3.1
3.1 3.2 3.3
3.0 2.8 2.8
3.7 3.8 3.7 3.9 4.3 4.2
4.2 4.1 3.9
4.3 4.2 4.1
3.8 3.8 3.2 3.3 3.6 3.3
3.2 3.2 3.2
3.1 3.1 3.1
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Public investment (as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
European Economic Forecast, Spring 2023
164
Table 13:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
2.0 1.2 1.3 1.6 1.3 1.5
1.8 1.7 1.5
1.7 1.7 1.6
1.3 1.1 1.5 1.1 0.8 0.8
0.5 0.6 1.1
0.7 0.7 0.8
5.2 0.5 3.0 4.0 3.7 3.1
2.4 1.8 1.8
2.8 1.7 1.6
3.6 -0.1 9.8 9.6 8.5 6.4
7.3 6.8 6.0
5.3 4.9 4.5
2.6 -1.8 -1.7 -0.7 -0.8 -0.3
0.4 1.0 1.5
0.3 0.6 1.0
3.5 0.5 0.5 0.9 0.1 0.6
1.1 1.2 1.5
1.0 0.8 1.1
1.8 1.1 0.8 0.8 0.8 1.1
1.1 1.1 1.1
1.2 1.1 1.1
2.9 -0.2 1.1 2.8 2.5 2.4
3.2 3.4 3.0
3.3 2.8 2.6
0.6 -0.2 0.0 0.0 -0.1 0.1
0.9 0.8 0.9
1.0 0.6 1.1
3.7 1.0 1.2 3.6 3.3 3.0
3.5 3.2 3.0
2.8 2.8 2.6
Latvia
6.6 -0.9 2.4 3.5 2.6 3.0
1.7 1.9 2.1
1.4 1.6 1.8
6.1 1.1 2.4 4.3 4.1 4.5
3.5 2.9 2.6
3.5 2.8 2.3
3.7 2.0 2.2 2.2 1.9 1.9
2.2 2.3 2.3
2.2 2.3 2.4
2.9 3.3 6.6 6.8 4.3 3.2
5.9 4.5 4.4
4.4 3.8 3.9
1.8 0.7 1.3 1.8 1.5 1.7
2.2 1.9 1.9
1.9 1.8 1.8
2.0 0.9 1.1 1.2 1.0 1.3
1.4 1.4 1.4
1.1 1.3 1.4
0.8 -0.7 0.9 1.7 1.3 2.0
1.8 2.0 2.1
1.8 1.8 1.8
5.8 2.9 2.2 2.5 1.4 1.7
1.9 2.5 2.1
1.4 1.6 1.6
3.5 1.2 1.3 2.6 2.3 2.6
3.1 3.0 3.1
3.2 2.9 3.0
2.3 0.2 0.8 1.3 0.9 1.0
1.6 1.1 1.2
1.7 1.2 1.2
1.7 0.6 1.1 1.2 0.9 1.1
1.3 1.3 1.4
1.2 1.1 1.3
5.7 1.0 2.5 2.5 2.2 2.3
2.2 2.6 2.1
1.6 1.9 2.0
4.4 1.1 2.7 2.6 1.4 0.5
2.1 1.5 1.6
2.2 1.5 1.7
1.5 0.9 1.8 1.7 1.6 1.9
2.2 1.9 1.6
1.8 1.5 1.4
2.9 0.3 2.6 4.5 3.5 3.7
3.4 2.5 2.5
3.4 2.8 2.6
3.8 3.6 3.5 4.1 3.7 3.5
3.4 3.7 3.4
4.0 3.2 2.9
6.5 1.4 3.9 4.2 3.4 2.8
2.9 3.3 3.2
2.8 2.5 2.3
2.6 1.6 2.2 2.2 1.9 2.0
1.8 1.6 1.5
1.6 1.5 1.5
1.9 0.8 1.3 1.5 1.2 1.3
1.5 1.5 1.6
1.4 1.3 1.4
2.2 1.0 1.4 0.9 0.4 0.7
0.9 0.8 0.8
0.7 0.8 1.0
: : : : : :
:
: : :
: : :
2.3 1.3 1.9 2.2 2.0 1.9
1.6 1.7 1.6
2.0 1.6 1.6
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Potential GDP, volume (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 14:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
1.2 -1.0 0.1 1.3 -5.4 -1.0
0.5 0.0 -0.2
0.6 -0.8 -0.9
0.1 -1.2 0.6 1.3 -3.2 -1.5
-0.2 -0.6 -0.3
-0.1 -1.4 -0.8
6.3 -4.8 0.4 1.3 -2.8 1.8
-1.9 -4.0 -2.8
-1.4 -2.4 -2.0
1.2 -2.8 1.9 -4.0 -6.1 0.3
4.6 3.3 2.3
4.9 3.2 1.7
1.7 -12.3 -12.6 -6.1 -13.8 -6.3
-1.1 0.3 0.8
-1.8 -1.4 -0.5
3.0 -6.5 -3.3 1.9 -9.8 -5.4
-1.3 -0.6 -0.2
-1.5 -1.3 -0.4
1.6 -1.9 -0.7 2.2 -6.5 -1.2
0.2 -0.3 0.0
0.2 -0.5 -0.1
4.1 -2.5 -1.2 2.5 -8.6 0.9
3.8 1.9 1.2
3.5 1.7 0.9
2.2 -2.4 -2.2 0.6 -8.3 -2.0
0.7 1.1 1.3
0.8 0.6 0.6
4.1 -2.6 -2.6 5.1 -2.7 0.7
2.7 1.8 1.5
3.5 1.8 1.0
Latvia
5.6 -6.0 1.5 2.1 -2.8 -1.6
-0.5 -1.0 -0.3
-0.4 -2.3 -1.5
5.0 -5.8 1.6 3.7 -0.3 1.1
-0.5 -2.7 -2.6
-0.1 -2.3 -2.3
1.5 -2.3 -0.5 -0.5 -3.2 -0.1
-0.8 -1.5 -1.4
-0.6 -1.9 -1.8
0.2 -1.6 2.7 3.8 -9.1 -1.4
-0.6 -1.1 -1.4
-0.1 -1.1 -1.3
0.0 -2.3 -0.6 1.4 -4.0 -1.0
1.2 1.1 0.4
1.7 0.5 0.0
0.6 -0.9 -0.1 2.1 -5.4 -2.4
1.1 0.0 0.2
1.1 0.1 -0.1
-0.7 -2.6 -0.7 3.1 -6.6 -3.4
1.3 1.7 1.3
1.6 0.5 0.4
2.5 -1.8 -0.2 2.0 -2.8 0.3
0.0 -0.7 -0.7
0.2 -0.9 -0.6
5.0 -4.4 -2.2 3.5 -3.2 2.1
4.3 2.6 1.6
4.8 2.7 1.3
1.7 -2.4 -1.3 0.4 -2.9 -0.9
-0.5 -1.4 -1.1
-0.4 -1.4 -1.2
1.3 -2.5 -1.0 1.2 -5.9 -1.9
0.3 0.1 0.2
0.4 -0.5 -0.2
1.9 -0.1 -0.8 1.3 -4.7 0.3
1.4 0.4 0.7
1.4 0.5 0.9
3.7 -1.5 0.3 2.7 -4.3 -1.4
-1.1 -2.3 -1.3
-1.0 -2.4 -2.3
3.0 -3.4 -1.5 -0.6 -4.1 -1.3
0.3 -1.2 -1.3
0.2 -1.3 -1.4
2.6 -4.0 1.3 3.9 -4.1 -0.8
0.3 -1.6 -1.2
1.1 -1.6 -1.6
0.4 0.4 -0.2 2.7 -2.9 0.3
1.9 -1.0 -1.7
0.9 -1.6 -1.9
5.1 -2.6 -0.5 1.3 -5.6 -2.9
-1.1 -1.2 -0.9
-0.6 -1.3 -1.4
1.4 -2.2 0.1 0.2 -3.7 -0.5
0.3 -1.8 -2.1
0.5 -1.5 -2.1
1.4 -2.4 -0.9 1.3 -5.6 -1.7
0.3 -0.1 0.0
0.4 -0.6 -0.4
1.3 -3.8 0.6 2.7 -8.9 -2.7
0.4 -0.6 -0.4
1.1 -0.6 -0.7
: : : : : :
:
: : :
: : :
0.8 -2.1 0.2 1.2 -3.6 0.3
0.7 0.4 -0.2
0.5 -0.4 -0.3
United States
¹ When comparing output gaps between successive forecasts it has to be taken into account that the overall revisions to the forecast may have led to changes in the estimates for potential output.
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Output gap relative to potential GDP ¹ (deviation of actual output from potential output as % of potential GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Statistical Annex
165
Table 15:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
2.0 1.5 1.5 1.7 1.5 2.8
5.9 3.8 2.3
6.7 5.0 3.1
0.9 1.4 1.7 2.1 1.8 3.1
5.5 6.1 2.4
5.3 6.8 3.6
7.7 3.0 2.9 3.2 -0.5 6.0
16.6 10.3 3.6
14.3 6.9 3.0
1.5 -0.5 2.2 3.6 -1.6 0.7
5.3 4.6 2.5
9.8 5.4 4.4
3.3 0.2 -0.5 0.2 -0.9 1.3
8.1 4.7 2.9
9.0 5.6 2.3
3.5 0.1 0.6 1.4 1.2 2.3
4.3 4.4 2.9
3.5 4.3 2.4
2.1 0.8 0.7 1.3 2.8 1.3
3.0 5.4 2.6
2.7 5.0 3.9
4.1 1.5 0.7 2.0 0.7 2.0
8.2 7.5 3.2
5.5 6.3 2.4
2.3 1.3 1.0 0.9 1.6 0.6
3.0 5.9 2.7
3.1 3.3 2.6
3.3 0.9 -0.1 1.3 -1.2 2.9
6.4 5.0 2.8
4.6 4.3 2.6
Latvia
12.4 0.2 1.9 2.6 1.0 6.5
13.1 8.9 2.7
11.0 6.2 3.8
6.9 1.7 2.0 2.7 1.9 6.3
16.8 10.4 3.1
16.5 8.9 2.3
4.6 2.9 1.6 1.4 4.7 6.2
6.4 5.5 3.4
5.7 4.2 2.9
2.3 2.1 2.6 2.3 1.6 1.9
5.2 4.2 3.1
5.0 4.1 2.8
2.0 0.8 1.0 3.0 1.9 2.4
5.3 6.1 2.6
3.4 5.0 4.4
2.1 1.7 1.8 1.5 2.6 1.9
5.0 7.2 4.2
6.1 5.8 3.7
2.7 0.7 1.6 1.7 2.0 1.5
4.4 5.8 2.3
3.6 5.2 2.5
3.0 0.6 0.5 2.5 2.4 2.4
7.5 9.8 5.7
7.5 12.2 4.9
3.1 1.1 1.2 2.3 1.3 2.6
7.2 7.3 4.3
6.6 6.2 3.7
1.6 2.0 1.2 1.5 1.6 2.2
4.2 4.4 2.4
5.3 3.7 2.2
2.1 1.0 1.2 1.7 1.8 2.1
4.6 5.7 2.7
4.6 5.3 3.4
7.6 2.4 3.3 5.2 4.3 7.1
15.1 10.4 3.9
12.3 4.2 3.7
2.1 0.8 1.7 3.9 4.3 3.3
8.6 11.3 5.5
9.2 8.1 4.8
2.7 1.5 0.7 1.0 2.6 2.8
7.6 0.2 2.1
3.3 4.4 2.7
4.3 2.9 3.3 4.8 6.4 6.4
15.3 13.0 3.5
9.2 10.0 5.0
3.4 2.2 1.0 3.0 4.3 5.3
11.3 11.8 5.8
12.8 10.3 5.1
14.0 3.8 3.7 6.8 4.1 5.2
13.4 10.7 5.8
11.4 10.0 8.0
1.8 1.3 2.0 2.5 2.0 2.9
5.7 5.7 1.6
6.3 5.2 2.0
2.2 1.1 1.3 1.9 2.0 2.4
5.4 6.1 2.9
5.2 5.7 3.5
2.9 1.8 1.5 2.1 5.9 0.0
5.4 5.2 1.8
5.4 7.5 2.3
-1.0 -1.0 0.8 0.6 0.9 -0.2
0.2 3.4 2.5
0.5 2.6 2.0
2.7 1.5 1.6 1.8 1.3 4.5
7.0 3.7 2.4
6.9 3.3 2.4
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Deflator of gross domestic product (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 16:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
2.8 1.4 1.4 1.4 0.9 2.5
8.6 3.4 2.6
8.3 5.4 2.8
1.5 1.2 1.0 1.3 0.6 3.1
6.9 5.9 2.2
7.1 6.9 2.8
5.7 3.0 1.8 2.5 -1.0 4.3
16.8 9.2 2.8
18.4 6.6 2.6
2.1 -0.9 1.0 1.8 0.8 3.9
6.5 4.9 3.2
6.1 5.8 2.8
3.5 0.5 -0.8 0.0 -1.2 1.0
7.5 4.2 2.4
9.1 6.6 2.7
3.5 1.3 0.6 1.1 0.0 2.1
6.8 4.0 2.5
8.5 4.8 2.1
2.2 0.7 0.6 0.8 1.0 1.6
5.0 5.8 2.7
5.3 4.6 2.2
3.4 2.4 0.1 1.1 0.6 2.4
10.9 6.9 2.7
10.1 6.5 2.3
2.5 1.5 0.5 0.6 0.1 1.5
7.4 5.5 2.6
7.4 5.6 2.3
3.4 1.6 -0.6 0.3 -0.9 0.9
8.0 3.8 2.5
8.0 4.2 2.5
Latvia
10.3 0.7 1.6 3.0 0.8 3.5
14.2 9.3 1.7
16.9 8.3 1.3
4.6 2.8 1.2 2.2 1.1 4.6
18.8 9.2 2.2
18.9 9.1 2.1
2.7 1.5 1.3 1.7 1.2 1.3
5.6 3.0 2.4
6.8 3.7 2.4
2.7 2.1 1.0 1.9 1.1 1.2
5.4 4.5 3.0
5.5 4.6 2.6
2.0 1.1 1.0 2.6 1.3 3.5
7.4 5.5 3.0
7.0 6.7 3.4
2.2 1.9 1.8 1.8 1.5 2.3
7.6 6.9 3.8
8.7 6.7 3.3
3.2 0.8 1.0 0.8 0.6 1.4
6.3 4.3 2.6
6.0 3.9 2.1
4.4 1.9 0.6 2.7 2.2 3.3
12.2 9.8 5.0
12.6 13.6 4.0
3.4 1.6 0.4 1.3 -0.6 3.5
11.7 6.5 3.6
12.2 6.0 2.7
1.6 2.4 0.9 1.0 0.3 1.8
5.5 4.3 1.8
6.8 4.0 1.7
2.3 1.2 0.8 1.1 0.6 2.3
6.9 5.5 2.6
7.2 5.8 2.5
5.5 1.5 2.5 2.0 -0.6 6.0
16.6 10.5 3.8
11.0 7.5 4.0
2.8 1.2 1.2 2.8 2.9 2.9
16.0 11.8 4.1
17.5 12.0 5.5
1.9 1.8 0.6 0.9 0.4 2.1
7.4 4.2 2.4
9.9 4.7 2.4
5.0 3.7 1.9 4.6 3.4 6.4
17.1 16.4 4.0
14.8 15.7 3.9
2.9 2.6 0.4 2.2 3.5 5.4
14.5 12.4 6.5
15.0 12.5 4.8
8.3 4.5 1.9 5.4 2.3 5.2
14.2 9.9 4.8
12.0 10.4 7.0
1.3 1.2 1.4 2.1 0.8 2.0
7.2 5.5 1.6
8.3 6.9 1.6
2.4 1.3 0.8 1.3 0.8 2.5
7.6 6.1 2.8
8.0 6.4 2.8
2.6 2.0 1.1 1.7 1.0 2.5
7.9 6.5 1.7
9.3 10.3 2.2
-0.2 -1.0 0.7 0.5 0.3 0.6
2.8 2.5 1.7
2.4 3.1 1.8
2.7 1.4 1.3 1.5 1.1 4.0
6.2 3.9 2.4
6.2 3.5 2.4
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Price deflator of private consumption (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
European Economic Forecast, Spring 2023
166
Table 17a:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
2.6 1.9 1.5 1.2 0.4 3.2
10.3 3.4 3.5
10.4 6.2 3.3
2.1 1.5 1.1 1.4 0.4 3.2
8.7 6.8 2.7
8.8 7.5 2.9
5.8 3.1 1.7 2.3 -0.6 4.5
19.4 9.2 2.8
19.3 6.6 2.6
2.6 0.1 0.2 0.9 -0.5 2.4
8.1 4.6 2.6
8.3 6.0 2.8
3.4 1.9 -0.1 0.5 -1.3 0.6
9.3 4.2 2.4
10.0 6.0 2.4
3.4 1.8 0.5 0.8 -0.3 3.0
8.3 4.0 2.7
8.5 4.8 2.3
2.2 1.5 0.9 1.3 0.5 2.1
5.9 5.5 2.5
5.8 4.4 2.2
3.4 2.2 0.4 0.8 0.0 2.7
10.7 6.9 2.2
10.1 6.5 2.3
2.4 2.0 0.6 0.6 -0.1 1.9
8.7 6.1 2.9
8.7 6.6 2.3
2.5 1.9 -0.3 0.5 -1.1 2.3
8.1 3.8 2.5
8.0 4.2 2.5
Latvia
9.0 1.7 1.3 2.7 0.1 3.2
17.2 9.3 1.7
16.9 8.3 1.3
4.9 2.8 1.3 2.2 1.1 4.6
18.9 9.2 2.2
18.9 9.1 2.1
3.3 2.2 1.0 1.6 0.0 3.5
8.2 3.2 2.6
8.4 3.8 3.1
2.6 2.1 1.2 1.5 0.8 0.7
6.1 5.4 2.8
6.1 4.0 2.4
1.7 2.0 0.7 2.7 1.1 2.8
11.6 4.9 3.3
11.6 4.2 3.9
2.2 2.1 1.5 1.5 1.4 2.8
8.6 7.1 3.8
8.7 6.7 3.3
2.6 1.5 0.7 0.3 -0.1 0.9
8.1 5.1 2.7
8.0 5.8 2.3
4.1 2.2 0.6 2.8 2.0 2.8
12.1 10.9 5.7
11.8 13.9 3.6
3.6 1.9 0.6 1.7 -0.3 2.0
9.3 7.0 3.8
9.2 6.5 3.5
1.5 2.4 0.7 1.1 0.4 2.1
7.2 4.8 2.1
7.2 4.3 1.9
2.4 1.7 0.8 1.2 0.3 2.6
8.4 5.8 2.8
8.5 6.1 2.7
7.8 2.3 0.0 2.5 1.2 2.8
13.0 9.4 4.2
12.8 7.4 3.2
3.1 1.8 1.1 2.6 3.3 3.3
14.8 11.9 3.4
15.6 9.5 3.5
2.0 1.8 0.5 0.7 0.3 1.9
8.5 4.3 2.5
7.9 3.7 2.0
5.7 4.0 1.2 3.4 3.4 5.2
15.3 16.4 4.0
14.8 15.7 3.9
2.8 3.0 0.4 2.1 3.7 5.2
13.2 11.7 6.0
13.3 13.8 4.9
8.1 4.8 1.0 3.9 2.3 4.1
12.0 9.7 4.6
11.8 10.2 6.8
1.7 1.3 1.2 1.7 0.7 2.7
8.1 6.0 1.9
8.1 6.6 1.8
2.6 1.9 0.8 1.4 0.7 2.9
9.2 6.7 3.1
9.3 7.0 3.0
2.4 2.6 1.5 1.7 1.0 2.5
7.9 6.7 2.4
7.9 7.5 2.9
0.3 -0.4 1.0 0.5 0.0 -0.2
2.5 3.2 1.8
2.5 3.1 1.8
3.2 1.6 1.5 1.8 1.2 4.7
8.0 4.3 2.6
7.9 3.4 2.3
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Harmonised index of consumer prices (national index if not available), (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 17b:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
1.8 1.8 1.7 1.6 1.5 1.4
4.9 7.7 3.2
5.0 6.7 3.8
1.5 1.2 1.4 1.4 0.9 2.3
5.0 6.5 3.8
5.0 5.6 3.3
4.8 2.4 2.1 2.3 0.2 2.4
11.8 11.2 5.4
11.5 7.2 4.2
2.2 -0.4 0.5 0.9 -0.1 1.6
5.0 5.3 4.1
5.1 5.9 3.7
3.2 1.0 0.1 0.5 -1.0 -0.7
5.7 5.7 2.5
5.6 4.7 2.7
2.9 1.3 0.6 1.0 0.6 0.7
5.2 4.9 2.5
5.1 4.4 2.8
1.7 1.2 0.8 1.2 1.0 1.2
3.8 5.4 2.8
3.7 4.4 2.5
3.2 1.7 0.8 1.1 0.8 1.8
9.1 8.0 3.0
7.7 5.8 2.7
2.2 1.8 0.7 0.6 0.5 0.8
4.0 5.8 3.1
3.9 4.1 2.4
1.3 1.3 -0.1 0.6 -0.6 1.0
5.3 4.9 3.1
5.3 5.2 3.2
Latvia
8.0 0.9 1.6 2.7 1.1 2.0
11.3 11.2 3.5
10.5 6.3 1.8
3.8 2.0 2.0 2.5 2.5 3.2
13.6 9.9 3.0
13.3 7.3 2.4
2.6 2.2 1.5 1.8 1.4 1.5
4.4 5.1 3.2
4.7 5.0 3.4
2.2 1.5 1.4 1.4 0.8 0.7
6.2 5.8 3.1
6.2 4.1 2.5
1.2 1.9 0.8 2.2 2.1 1.6
5.5 7.4 3.4
5.5 5.7 2.9
1.7 2.0 1.9 1.6 2.0 2.1
5.7 7.4 5.0
5.4 5.4 4.1
2.3 1.0 0.8 0.5 0.0 0.3
6.2 5.9 3.0
6.1 5.8 2.7
3.2 2.0 1.1 2.5 2.4 3.4
10.4 10.9 3.1
10.1 8.7 3.7
3.0 1.1 0.8 1.8 1.0 1.0
6.8 6.8 3.6
6.3 4.9 3.2
1.1 2.2 0.9 1.0 0.8 1.4
4.4 4.9 2.4
4.6 2.8 1.7
1.9 1.4 1.0 1.2 0.9 1.5
4.8 6.1 3.2
4.8 5.0 2.9
7.6 2.1 0.1 2.5 2.0 1.9
10.4 10.9 5.3
10.2 8.0 4.1
2.6 1.2 1.5 2.3 3.7 3.8
12.4 9.0 3.8
12.5 8.9 3.4
1.6 1.6 0.7 0.8 0.9 1.1
5.3 6.3 3.4
5.2 4.3 3.1
4.7 3.7 1.8 3.7 3.7 4.5
14.2 16.4 5.6
14.0 14.4 5.0
2.0 2.4 0.6 2.3 4.2 4.2
10.3 10.8 6.2
10.4 10.9 5.6
7.5 4.7 1.1 3.8 3.3 3.1
8.8 10.9 6.2
8.6 10.5 7.5
1.1 1.3 1.1 1.6 1.5 1.6
5.5 6.4 2.7
5.6 5.9 2.5
2.1 1.6 1.0 1.4 1.3 1.8
5.8 6.9 3.6
5.8 5.9 3.3
1.6 2.6 1.6 1.8 : :
:
: : :
: : :
: : : : : :
:
: : :
: : :
: : : : : :
:
: : :
: : :
All-items HICP, excluding energy and unprocessed food (national index if not available), (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Statistical Annex
167
Incorrect slice name
Table 18:
28.04.2023
2022/1 2022/2 2022/3 2022/4 2023/1 2023/2 2023/3 2023/4 2024/1 2024/2 2024/3 2024/4
9.1 9.9 11.0 11.2 5.9 3.5 3.0 1.2 4.0 4.6 3.2 2.1
6.1 8.3 9.4 10.8 8.7 7.7 6.5 4.6 3.9 2.7 2.2 2.1
12.5 20.4 24.1 20.4 17.3 10.8 6.1 3.7 3.5 2.8 2.4 2.6
5.9 8.4 9.1 8.8 7.5 5.5 3.7 1.9 2.2 2.2 2.8 3.1
6.6 10.4 11.5 8.6 6.4 4.4 3.2 3.2 2.9 2.4 2.2 2.2
7.9 8.9 10.0 6.5 5.0 4.0 3.7 3.4 3.3 2.8 2.5 2.3
4.2 5.9 6.5 7.0 7.0 5.8 5.1 4.2 3.3 2.3 2.1 2.1
6.4 10.8 12.6 12.8 11.6 7.9 5.0 3.5 3.1 2.4 1.7 1.4
6.0 7.4 8.9 12.5 9.5 6.9 5.9 2.6 3.0 3.3 2.8 2.3
5.7 8.8 9.7 8.1 6.5 2.7 3.1 3.1 2.8 2.4 2.5 2.4
Latvia
9.2 16.4 21.6 21.4 19.5 11.0 4.7 2.8 2.2 1.8 1.9 1.8
13.9 18.5 21.5 21.2 17.0 11.6 6.1 3.1 2.2 2.0 2.2 2.3
6.8 9.5 8.9 7.5 4.5 3.2 3.0 2.2 3.1 2.7 2.5 2.3
4.3 5.8 7.1 7.3 7.0 5.6 4.8 4.2 3.0 2.8 2.8 2.8
8.9 10.4 14.1 13.0 7.2 6.9 3.3 2.6 4.8 3.3 2.7 2.3
5.5 7.9 9.9 11.1 10.6 8.3 5.9 4.4 2.9 2.5 4.7 4.6
4.4 8.2 9.5 10.2 8.4 5.3 3.9 3.0 2.9 2.7 2.7 2.6
8.5 11.8 13.3 14.9 15.1 12.4 9.5 7.1 6.9 5.4 5.3 5.2
6.3 9.0 11.3 10.6 9.9 7.6 5.6 5.1 4.7 4.2 3.4 3.1
4.8 7.0 8.1 8.7 7.5 5.4 4.0 2.7 2.3 2.1 2.0 1.9
6.1 8.0 9.3 10.0 8.0 6.4 5.2 3.6 3.5 2.8 2.5 2.3
14.1 13.4 15.2 14.5 13.4 9.4 8.3 6.9 5.5 4.4 3.8 3.4
10.2 15.0 17.4 16.5 18.0 12.2 9.1 9.0 3.3 3.6 3.4 3.1
5.4 8.2 10.2 10.2 8.0 4.6 2.6 2.1 2.4 3.0 2.6 2.1
8.3 11.0 18.0 23.3 25.9 21.8 13.4 6.7 3.1 3.5 4.4 5.0
9.0 12.8 14.9 15.9 16.1 12.9 10.5 7.8 7.0 5.9 5.7 5.3
8.2 12.4 13.3 14.1 13.0 10.3 8.7 7.3 5.8 4.9 4.2 3.4
4.9 7.7 9.4 10.2 9.1 6.7 4.9 3.4 1.9 1.6 1.7 2.3
6.5 8.8 10.3 11.0 9.4 7.4 5.9 4.2 3.6 3.0 2.7 2.5
5.5 7.9 8.8 9.4 10.0 8.0 5.0 4.0 3.0 2.5 2.0 2.0
0.9 2.4 2.9 3.9 3.8 3.5 3.0 2.4 2.1 1.8 1.7 1.6
8.0 8.6 8.3 7.1 5.8 4.3 3.7 3.4 3.1 2.8 2.5 2.2
Japan
United States
Hungary
Poland
Romania
Sweden
EU
United Kingdom
Denmark
Luxembourg
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Czechia
Bulgaria
Lithuania
Harmonised index of consumer prices (national index if not available), (percentage change on preceding year, 2022-24)
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Table 19:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
2.9 1.2 -0.5 0.4 -3.5 8.7
17.1 1.9 1.7
18.0 5.5 0.1
0.7 0.7 0.3 0.4 -0.7 4.5
12.6 2.3 1.2
13.5 5.3 0.8
4.4 1.3 0.8 -0.4 -2.0 10.4
23.3 2.4 2.9
22.2 7.4 3.0
0.6 -0.5 0.4 -0.4 -7.0 -2.3
2.5 2.6 1.4
9.8 5.9 3.2
3.3 -0.3 -1.8 -0.5 -12.8 14.1
36.5 5.0 3.4
33.0 7.5 2.0
3.0 1.3 0.4 0.4 -1.2 9.2
18.8 1.8 1.3
9.4 2.1 1.5
2.0 0.3 -0.1 1.1 -1.4 6.0
16.7 4.1 2.9
16.3 8.3 3.4
4.3 1.7 -1.1 0.5 -4.1 7.0
12.3 6.0 3.0
10.0 5.5 2.1
2.1 1.1 0.5 0.6 -0.6 5.3
12.2 3.5 3.0
11.0 5.6 4.1
3.2 1.7 0.5 0.4 -1.0 2.1
3.0 2.8 2.0
12.0 6.0 2.5
Latvia
11.0 3.1 0.7 -0.2 -1.1 14.3
19.9 3.0 2.0
23.0 4.0 2.0
8.6 1.4 -0.9 -0.2 -5.0 5.9
12.2 5.4 2.1
15.3 5.1 1.3
5.7 1.6 1.3 -0.4 -0.1 7.9
16.7 3.9 2.2
18.0 4.7 3.0
1.0 -0.5 0.9 0.9 0.6 3.4
10.3 4.2 2.9
10.0 5.5 2.6
2.8 0.9 -0.8 -0.2 -4.3 10.0
20.6 1.4 1.4
21.0 5.6 0.0
1.9 0.8 0.1 -1.1 -1.2 6.3
9.2 1.1 0.8
5.6 2.7 2.2
2.5 0.8 -0.6 -0.3 -2.4 7.6
16.2 0.2 1.2
15.5 1.9 0.9
1.5 0.0 -0.6 -0.3 -2.7 5.4
15.7 1.0 4.0
18.6 6.9 4.9
2.2 0.8 0.4 -0.6 -2.0 5.0
17.3 2.9 2.7
20.7 7.3 3.2
0.5 0.2 0.3 -0.7 -4.9 13.3
23.4 0.3 0.8
18.5 4.5 1.8
1.8 0.8 0.1 0.3 -2.2 6.0
14.5 2.4 1.8
14.4 5.5 1.8
14.7 0.7 0.7 1.7 -2.0 16.9
24.8 2.0 3.0
29.0 7.0 4.0
-1.3 0.9 -0.4 1.0 1.0 4.8
9.2 7.0 5.0
11.0 7.0 4.0
3.5 1.3 -0.2 -0.2 -1.5 2.8
10.6 3.0 2.0
9.2 9.0 3.1
0.0 2.0 0.8 1.7 4.7 7.7
23.0 -0.8 1.3
20.2 7.5 0.1
1.8 5.1 1.1 3.2 2.7 10.1
20.0 6.3 1.8
20.0 11.0 3.6
10.4 3.8 -0.5 2.2 0.8 11.2
17.0 6.2 3.6
17.0 7.5 3.2
2.2 -1.2 2.3 3.4 -4.2 5.6
18.4 2.2 2.5
19.5 4.0 0.8
1.8 0.9 0.2 0.6 -1.7 6.2
14.9 2.7 1.9
14.9 5.9 1.9
3.3 2.8 0.7 1.8 -2.9 5.2
16.7 6.2 2.6
18.1 8.8 2.4
0.1 -1.7 -0.1 -3.8 -2.9 7.1
14.4 6.9 3.5
14.1 6.9 2.8
3.8 0.8 -1.2 -1.6 -3.9 14.2
11.5 0.6 2.0
12.5 1.2 1.0
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Price deflator of exports of goods in national currency (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
European Economic Forecast, Spring 2023
168
Table 20:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
3.9 1.5 -0.9 -0.4 -4.6 10.9
23.2 0.0 1.6
24.0 5.5 -0.5
1.8 0.4 -0.6 -0.6 -3.4 9.1
20.0 -1.0 1.2
21.5 3.3 -1.1
3.2 1.9 -0.3 0.2 -3.1 9.8
22.7 0.8 2.1
23.0 7.4 2.6
1.7 -0.6 1.5 -3.4 -4.7 7.5
6.1 1.4 1.0
9.3 7.0 2.1
3.5 0.8 -2.0 0.9 -9.0 13.7
26.3 2.1 1.5
31.0 8.0 1.8
3.3 1.6 0.4 0.3 -3.9 9.1
25.2 0.7 0.8
20.0 2.8 1.2
2.4 0.5 -0.9 -0.1 -2.7 8.1
21.1 -1.2 2.2
22.3 4.7 1.7
2.5 1.6 -0.2 0.2 -0.3 7.4
16.1 3.0 2.0
14.1 4.0 2.0
4.3 1.1 -1.1 -0.9 -4.8 12.2
24.8 -0.5 0.8
20.8 7.6 2.3
3.6 1.8 -1.4 0.4 0.2 2.8
5.2 2.1 1.7
22.5 6.0 2.5
Latvia
9.0 2.9 -0.8 -1.1 -4.2 11.4
19.8 1.0 2.0
25.0 6.0 -1.0
6.0 2.7 -1.7 -1.6 -6.4 13.2
26.2 1.0 1.5
23.8 4.5 1.3
4.3 1.5 0.6 -0.8 -1.9 7.8
21.5 1.7 2.0
23.2 5.0 2.8
0.7 1.1 -0.5 1.4 -0.1 1.1
7.8 3.5 2.1
11.0 5.9 2.5
2.9 1.4 -1.3 -1.1 -5.2 12.4
24.5 -1.8 1.1
28.0 5.8 -2.0
2.8 1.2 -0.2 -0.1 -1.9 7.9
14.3 -1.2 0.0
8.0 3.3 2.0
3.2 -0.1 -1.0 -0.7 -4.0 7.1
19.8 -2.4 1.2
19.8 -0.2 0.1
2.4 1.0 -0.2 0.1 -2.3 6.5
21.1 -0.3 3.3
22.2 6.6 4.8
3.3 1.4 0.0 -1.0 -2.8 7.4
20.7 0.9 1.6
25.7 8.2 3.0
3.1 0.7 -0.7 -0.1 -7.0 13.2
24.1 -0.9 0.7
22.0 4.6 1.4
2.8 0.9 -0.7 -0.6 -3.9 9.8
21.4 -0.6 1.3
21.6 4.7 0.4
9.5 0.6 -0.6 -0.1 -6.0 16.2
23.6 0.0 3.0
24.0 9.0 4.0
-0.3 1.1 -0.8 0.6 -0.8 4.9
15.2 3.5 3.0
17.5 9.0 3.5
2.5 0.6 -0.4 0.3 -3.1 8.4
22.4 -1.5 2.2
20.0 7.4 2.2
1.1 2.3 0.4 1.2 2.7 11.8
31.7 -4.9 1.3
27.2 8.0 -1.6
0.8 4.8 0.0 1.7 -0.4 12.3
24.4 3.1 1.2
25.2 13.0 3.0
2.7 4.0 -0.2 0.2 -2.5 10.2
17.9 2.4 3.2
19.0 7.8 3.4
2.8 -1.4 2.0 2.3 -5.3 5.0
23.6 1.0 2.5
22.5 5.0 0.5
2.7 1.0 -0.5 -0.3 -3.5 9.7
21.7 -0.3 1.4
21.7 5.5 0.7
2.8 2.1 0.4 1.0 -1.8 6.3
18.5 5.3 2.1
21.0 12.4 2.2
7.7 -0.5 -1.4 -4.7 -9.1 17.8
31.8 2.2 -0.1
27.6 6.2 1.6
5.8 -0.2 -2.1 -2.1 -2.8 7.8
7.8 1.6 1.7
8.6 2.2 1.2
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Price deflator of imports of goods in national currency (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 21:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
-1.0 -0.2 0.4 0.8 1.2 -2.0
-5.0 2.0 0.1
-4.8 0.0 0.6
-1.0 0.4 0.9 1.1 2.8 -4.2
-6.2 3.3 0.0
-6.6 2.0 1.9
1.1 -0.6 1.1 -0.7 1.1 0.6
0.5 1.6 0.8
-0.7 0.0 0.4
-1.0 0.0 -1.1 3.1 -2.4 -9.1
-3.4 1.2 0.4
0.5 -1.0 1.1
-0.2 -1.2 0.2 -1.4 -4.1 0.4
8.0 2.8 1.9
1.5 -0.5 0.2
-0.4 -0.3 0.0 0.1 2.8 0.1
-5.1 1.0 0.5
-8.8 -0.7 0.3
-0.4 -0.2 0.8 1.3 1.3 -2.0
-3.7 5.4 0.7
-5.0 3.5 1.7
1.8 0.1 -0.9 0.3 -3.8 -0.4
-3.3 2.9 1.0
-3.6 1.4 0.1
-2.2 0.0 1.6 1.6 4.5 -6.2
-10.1 4.0 2.2
-8.1 -1.9 1.8
-0.4 0.0 2.0 0.0 -1.2 -0.6
-2.1 0.7 0.3
-8.6 0.0 0.0
Latvia
1.8 0.2 1.5 0.9 3.2 2.6
0.1 2.0 0.0
-1.6 -1.9 3.0
2.4 -1.3 0.9 1.3 1.5 -6.4
-11.1 4.4 0.6
-6.9 0.6 0.0
1.3 0.1 0.7 0.4 1.8 0.1
-4.0 2.2 0.2
-4.2 -0.2 0.2
0.3 -1.6 1.4 -0.5 0.7 2.3
2.3 0.7 0.8
-0.9 -0.4 0.1
-0.2 -0.5 0.6 0.9 1.0 -2.2
-3.1 3.3 0.3
-5.5 -0.2 2.0
-0.8 -0.4 0.3 -1.0 0.8 -1.5
-4.5 2.3 0.8
-2.2 -0.6 0.2
-0.6 0.9 0.5 0.4 1.6 0.5
-3.0 2.7 0.0
-3.6 2.1 0.8
-0.9 -1.1 -0.4 -0.3 -0.4 -1.1
-4.4 1.3 0.7
-2.9 0.3 0.1
-1.1 -0.6 0.5 0.4 0.8 -2.3
-2.8 2.0 1.1
-4.0 -0.8 0.2
-2.5 -0.5 1.0 -0.6 2.3 0.1
-0.6 1.2 0.1
-2.9 -0.1 0.4
-1.0 -0.1 0.7 0.9 1.7 -3.5
-5.9 2.6 0.4
-6.1 0.7 1.4
4.8 0.1 1.2 1.9 4.3 0.6
1.0 2.0 0.0
4.0 -1.8 0.0
-1.0 -0.2 0.3 0.4 1.8 -0.2
-5.2 3.4 1.9
-5.5 -1.8 0.5
1.0 0.7 0.2 -0.5 1.7 -5.2
-9.6 4.6 -0.2
-9.0 1.5 0.9
-1.1 -0.3 0.4 0.5 2.0 -3.7
-6.6 4.3 0.0
-5.5 -0.5 1.7
1.0 0.3 1.0 1.5 3.2 -2.0
-3.6 3.1 0.6
-4.2 -1.8 0.6
7.4 -0.3 -0.4 2.1 3.3 0.9
-0.7 3.7 0.4
-1.7 -0.3 -0.2
-0.6 0.2 0.3 1.1 1.1 0.5
-4.2 1.2 0.0
-2.4 -1.0 0.3
-0.9 -0.1 0.6 0.9 1.8 -3.2
-5.7 2.9 0.5
-5.8 0.3 1.2
0.5 0.7 0.2 0.8 -1.1 -1.0
-1.5 0.8 0.5
-2.4 -3.2 0.2
-7.1 -1.3 1.3 0.9 6.8 -9.1
-13.2 4.5 3.6
-10.5 0.7 1.1
-2.0 0.9 0.9 0.6 -1.1 5.9
3.5 -1.0 0.3
3.6 -1.0 -0.2
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Terms of trade of goods (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Statistical Annex
169
Table 22:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
0.6 0.8 0.5 0.5 0.5 0.4
0.9 0.7 0.3
0.7 0.6 0.4
-0.2 0.0 0.6 0.2 0.1 0.0
0.7 0.8 0.2
0.9 0.4 0.1
-0.5 -0.3 0.0 0.4 0.3 0.1
0.1 1.9 0.1
2.3 0.8 -0.1
2.4 0.5 1.0 1.4 1.1 0.8
1.9 1.6 0.8
1.7 1.5 1.4
0.3 -0.2 -0.4 -0.1 -0.2 -0.5
-0.6 -0.5 -0.4
-0.4 -0.4 -0.4
1.7 0.3 0.1 0.8 0.5 -0.1
0.6 0.6 0.7
1.0 0.7 0.7
0.7 0.5 0.4 0.5 0.4 0.3
0.4 0.4 0.3
0.4 0.3 0.3
0.0 -0.3 -0.8 -0.6 -0.5 -2.2
-1.3 -0.2 -0.5
-0.4 -0.3 -0.2
0.6 0.4 -0.1 -0.2 -0.5 -0.5
-0.3 0.0 -0.1
0.6 0.5 -0.1
1.8 1.8 0.2 1.4 1.1 0.9
1.4 1.3 1.0
2.0 1.3 1.0
Latvia
-1.0 -1.6 -0.9 -0.7 -0.6 -0.9
0.2 -0.5 -0.7
0.3 -0.5 -0.7
-1.3 -1.6 -1.1 -0.3 0.0 0.5
0.9 0.3 -0.3
0.6 0.3 -0.7
1.6 2.2 2.2 2.1 1.5 1.6
2.2 2.5 2.0
2.5 2.2 2.0
0.5 0.8 2.6 4.0 2.2 0.5
2.3 1.8 1.8
2.0 1.7 1.7
0.3 0.4 0.5 0.7 0.6 0.5
1.0 0.8 0.7
0.5 0.8 0.8
0.5 0.4 0.8 0.5 0.4 0.4
1.1 0.3 0.2
1.2 0.7 0.4
0.2 -0.2 -0.3 0.0 0.1 -0.1
-0.1 0.1 0.1
0.0 0.0 0.0
0.1 0.0 0.1 0.1 0.1 -0.4
1.1 0.4 0.0
1.1 0.5 0.0
0.3 0.4 0.1 0.8 0.7 0.2
0.0 0.2 0.2
0.1 0.2 0.2
0.4 0.5 0.3 0.1 0.2 0.2
0.3 0.4 0.2
0.6 0.4 0.2
0.5 0.2 0.3 0.3 0.2 0.0
0.4 0.5 0.3
0.7 0.5 0.2
-0.5 -1.0 -0.7 -0.7 -0.6 -0.8
-0.8 0.6 -0.6
-0.6 -0.6 -0.6
0.4 0.2 0.2 0.4 0.3 0.0
-0.1 0.3 0.1
2.7 1.2 0.0
0.4 0.4 0.6 0.4 0.2 0.4
0.9 0.6 0.4
0.7 0.6 0.6
-0.2 -0.3 -0.2 0.0 -0.2 -0.4
-0.3 -0.1 -0.4
0.3 0.0 -0.2
0.0 0.2 0.0 -0.1 -0.1 -0.5
-0.9 2.2 -1.1
2.6 1.0 -0.2
-1.0 -0.5 -0.5 -0.5 -0.6 -0.7
-0.4 -0.1 -0.4
-0.8 -0.8 -0.8
0.6 0.8 1.2 1.0 0.7 0.6
0.7 0.7 0.7
0.4 0.3 0.3
0.3 0.2 0.2 0.2 0.1 -0.1
0.2 0.6 0.1
0.8 0.5 0.1
0.7 0.7 0.7 0.5 0.4 0.4
0.7 0.4 0.4
0.3 0.3 0.3
0.1 -0.1 -0.2 -0.1 -0.3 -0.1
-0.4 -0.5 -0.5
-0.5 -0.5 -0.5
0.9 0.8 0.7 0.5 0.4 0.2
0.4 0.5 0.5
1.0 0.4 0.5
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Total population (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 23:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
1.4 0.4 1.1 1.6 0.1 1.9
2.0 0.6 0.9
1.8 0.3 0.6
0.8 0.7 1.2 0.9 -0.8 0.1
1.3 0.6 0.2
1.2 -0.1 0.3
1.3 -1.1 1.5 1.3 -2.7 0.1
4.6 0.2 0.4
2.8 -0.1 0.5
3.1 -2.4 3.1 3.0 -2.8 6.0
6.6 2.4 0.9
3.1 0.8 0.6
1.6 -2.4 1.6 2.2 -1.8 2.7
3.8 0.8 0.7
1.9 0.4 0.6
3.1 -3.4 2.2 2.6 -4.2 2.5
2.8 0.8 1.1
3.1 0.8 0.9
0.8 0.0 0.7 1.2 -0.7 2.5
2.4 0.3 0.4
1.0 -0.1 0.5
2.0 -3.0 1.8 3.1 -1.2 1.2
2.3 1.0 1.2
2.2 0.2 0.6
0.9 -0.8 0.8 0.5 -2.1 0.6
1.7 0.5 0.1
2.2 -0.3 0.6
3.5 -1.6 3.0 3.8 -1.2 1.3
2.9 1.7 1.9
1.6 0.7 1.4
Latvia
2.0 -3.1 0.2 -0.1 -2.3 -2.6
2.7 0.1 1.6
3.4 -0.1 0.3
0.0 -1.8 1.3 0.6 -1.6 1.2
5.1 -0.6 -0.3
3.8 -2.2 -0.4
3.6 2.0 3.0 3.5 1.7 3.0
3.5 2.4 2.3
3.1 2.1 2.8
1.6 2.4 5.7 5.7 2.8 2.9
6.0 2.3 2.3
2.9 2.5 2.5
1.3 -0.4 1.5 2.3 -0.5 2.0
4.0 1.0 0.7
2.9 0.5 0.5
1.5 0.6 1.2 1.1 -1.6 2.0
2.6 0.6 0.9
2.5 0.6 0.7
-0.1 -2.6 2.0 0.8 -1.8 1.9
2.0 0.5 0.6
1.0 0.2 0.5
1.8 -0.5 2.0 1.0 -1.9 -0.6
1.8 0.6 0.1
2.0 0.0 -0.2
1.4 -1.5 1.9 2.5 -0.7 1.3
2.4 0.7 0.5
2.9 0.3 0.5
1.7 -0.3 0.7 1.8 -1.9 2.7
2.5 -0.2 0.4
2.1 -0.1 0.4
1.2 -0.6 1.3 1.3 -1.5 1.4
2.3 0.6 0.5
1.8 0.1 0.5
2.8 -2.1 0.6 0.3 -2.3 0.2
1.3 0.3 0.3
0.4 0.0 0.2
1.5 -0.5 1.3 0.2 -1.7 0.4
1.7 0.7 0.6
0.4 0.7 0.6
1.3 -1.2 1.4 1.4 -1.1 2.4
3.9 -0.3 -0.2
4.3 -1.4 -0.1
-0.7 -0.1 2.9 1.1 -1.1 1.1
1.7 0.0 0.5
1.9 0.0 0.4
3.0 -0.3 1.2 0.0 0.0 2.5
0.4 0.1 0.3
1.4 0.1 0.3
-0.4 -1.7 0.2 0.1 -2.1 1.8
0.1 -0.3 0.0
0.5 -1.4 -0.1
0.8 0.5 1.8 0.6 -1.3 1.2
2.7 0.2 0.3
2.9 -0.1 0.1
1.3 -0.7 1.2 1.1 -1.4 1.5
2.0 0.5 0.4
1.8 0.0 0.4
1.0 0.3 1.6 1.1 -0.9 -0.3
1.0 -0.2 0.3
0.7 -0.4 0.5
0.5 -0.4 0.9 0.9 -0.5 -0.1
0.2 -0.1 -0.1
0.2 0.2 0.2
0.9 -0.1 1.6 1.2 -5.8 3.4
3.7 1.0 0.1
3.8 -0.2 0.3
United States
Note: For the countries publishing also employment in full-time equivalents (see note 6) as well as the EU and EA aggregates, this table now also displays employment in persons, limiting the comparability to figures published in
previous forecasts.
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Total employment in persons (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
European Economic Forecast, Spring 2023
170
Table 24:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
2.5 -4.0 2.4 2.6 -7.6 6.6
3.8 1.1 1.3
3.3 0.9 1.5
0.9 -0.1 0.6 1.3 -0.6 2.4
2.4 0.3 0.4
1.0 -0.1 0.5
0.6 -1.4 0.8 0.1 -10.3 8.9
3.8 0.8 0.6
3.4 0.2 1.1
1.3 -0.6 1.7 2.2 0.6 2.0
4.0 1.0 0.7
2.9 0.5 0.5
Euro area
1.1 -0.9 1.3 1.3 -3.3 1.4
2.3 0.7 0.6
2.0 0.2 0.7
1.1 -0.9 1.3 1.1 -2.7 1.5
2.0 0.5 0.5
1.9 0.1 0.6
Italy
Netherlands
EU
Total employment in full-time equivalents (percentage change on preceding year, 2004-2024)
averages
Autumn 2022
forecast
Spring 2023
forecast
Spain
France
Table 25:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
8.0 8.0 7.7 5.5 5.8 6.3
5.6 5.8 5.7
5.8 6.4 6.3
9.1 5.9 4.0 3.0 3.7 3.7
3.1 3.2 3.1
3.1 3.5 3.5
6.8 12.2 6.3 4.5 6.9 6.2
5.6 6.2 6.1
6.1 6.6 6.2
5.2 14.4 8.5 5.0 5.9 6.2
4.5 4.3 4.3
4.4 4.8 5.0
9.4 18.7 23.4 17.9 17.6 14.7
12.5 12.2 11.8
12.6 12.6 12.1
9.6 22.0 19.7 14.1 15.5 14.8
12.9 12.7 12.4
12.7 12.7 12.6
8.4 9.5 9.8 8.4 8.0 7.9
7.3 7.4 7.5
7.7 8.1 7.7
11.3 13.6 13.3 6.6 7.5 7.6
7.0 6.6 6.1
6.3 6.3 5.9
7.2 9.6 11.7 9.9 9.3 9.5
8.1 7.8 7.7
8.3 8.7 8.5
4.4 9.5 12.7 7.1 7.6 7.5
6.8 6.9 6.4
7.2 7.2 6.9
Latvia
8.6 16.1 9.3 6.3 8.1 7.6
6.9 6.8 6.5
7.1 8.1 7.9
7.0 14.4 8.2 6.3 8.5 7.1
6.0 6.6 6.5
6.0 7.1 7.0
4.7 5.1 6.0 5.6 6.8 5.3
4.6 4.8 5.0
4.7 5.1 4.9
6.7 6.5 4.7 3.6 4.4 3.4
2.9 2.9 2.9
3.2 3.1 3.0
5.7 6.5 6.8 4.4 4.9 4.2
3.5 3.8 3.9
3.7 4.3 4.3
5.5 5.3 5.9 4.8 6.0 6.2
4.8 4.9 5.0
5.0 5.2 5.3
8.9 14.2 11.1 6.7 7.0 6.6
6.0 6.5 6.3
5.9 5.9 5.7
13.7 13.6 9.8 5.7 6.7 6.8
6.1 5.8 5.4
6.3 6.4 6.4
5.6 8.1 7.7 4.4 5.0 4.8
4.0 3.9 3.8
4.1 4.3 4.1
7.7 8.2 8.6 6.8 7.7 7.7
6.8 7.1 6.8
7.0 7.2 6.9
8.4 10.8 10.0 7.6 8.0 7.7
6.8 6.8 6.7
6.8 7.2 7.0
10.2 11.7 8.9 5.2 6.1 5.3
4.3 4.3 4.0
5.2 5.2 5.3
6.6 6.9 4.1 2.0 2.6 2.8
2.2 2.8 2.6
2.7 3.3 3.6
4.3 7.4 6.0 5.0 5.6 5.1
4.5 5.0 5.1
4.5 5.5 5.6
7.0 10.3 5.3 3.3 4.1 4.1
3.6 4.2 4.0
3.6 4.2 4.2
14.0 9.9 6.4 3.3 3.2 3.4
2.9 3.3 3.2
2.7 3.0 3.1
8.5 8.8 7.1 4.9 6.1 5.6
5.6 5.4 5.1
5.4 5.8 5.4
6.8 8.3 7.2 7.0 8.5 8.8
7.5 7.7 8.2
7.2 7.6 7.8
8.8 10.4 9.2 6.8 7.2 7.1
6.2 6.2 6.1
6.2 6.5 6.4
5.2 7.8 5.0 3.8 4.6 4.5
3.7 4.3 4.6
3.8 4.4 4.8
4.2 4.6 3.1 2.4 2.8 2.8
2.6 2.5 2.4
2.7 2.5 2.5
5.1 8.7 4.9 3.7 8.1 5.3
3.5 4.1 4.8
3.7 4.1 4.4
United States
¹ Series following Eurostat definition, based on the Labour Force Survey.
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Unemployment rate ¹ (number of unemployed as a percentage of total labour force, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Statistical Annex
171
Table 26:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
2.9 2.3 1.1 2.0 -1.6 4.1
7.2 9.0 3.4
6.4 9.0 4.3
1.0 2.1 2.7 3.4 0.4 3.1
4.2 5.5 5.3
4.5 5.4 4.3
14.6 2.5 6.6 7.2 6.2 9.8
8.3 10.3 4.8
9.7 9.7 4.7
5.1 -0.4 2.3 3.8 3.7 2.6
4.2 5.6 5.8
3.6 6.0 5.2
4.8 -3.3 -2.2 -0.3 -0.6 2.3
0.3 3.6 2.8
5.3 3.9 2.7
4.5 1.4 0.5 3.2 2.8 -0.7
2.0 4.7 3.5
2.6 4.9 2.7
2.9 2.2 1.5 -0.2 -2.9 4.7
5.0 5.4 3.1
4.7 4.5 2.6
4.7 1.0 0.0 0.4 1.2 10.4
7.9 7.5 3.3
7.7 6.8 3.9
3.0 1.5 0.7 1.8 3.8 -1.3
2.6 3.5 3.6
3.0 2.5 2.7
3.6 1.0 -0.6 4.4 -0.5 3.8
3.8 6.3 4.0
4.7 7.0 3.8
Latvia
23.0 -0.6 7.7 7.8 5.0 11.1
9.0 10.8 5.3
10.7 7.2 7.2
14.9 1.1 6.8 10.6 6.6 11.9
10.6 10.4 6.2
11.0 6.3 6.7
3.8 2.3 2.1 1.9 1.2 6.0
5.4 6.9 3.4
5.1 4.7 3.0
3.1 2.9 4.4 4.5 -0.4 4.6
2.8 5.6 3.1
3.4 2.4 2.0
2.6 2.1 1.1 2.8 3.5 2.2
3.9 5.5 4.8
3.4 4.5 4.3
2.7 1.9 2.2 2.8 1.8 2.8
4.6 8.3 6.6
4.3 6.6 4.9
3.2 0.6 1.2 4.8 1.5 4.1
6.1 5.7 2.9
4.6 4.3 3.0
8.0 3.0 3.8 6.8 3.9 6.9
6.0 9.7 7.4
7.5 6.0 9.4
6.5 1.4 2.6 5.0 3.4 7.9
4.3 7.7 5.3
2.2 6.3 4.5
3.5 2.3 0.7 1.2 0.4 3.6
3.2 4.5 3.8
3.4 3.5 2.6
2.8 2.0 1.5 2.2 1.1 3.9
4.4 5.5 4.2
4.2 4.9 3.6
10.2 8.3 7.4 6.9 7.2 11.3
18.4 13.5 9.1
15.4 9.0 6.7
5.7 1.6 5.0 7.2 3.1 5.0
5.5 7.3 6.6
7.7 6.5 6.4
3.5 2.2 1.6 1.9 2.6 2.9
2.9 4.9 5.3
3.3 4.7 5.0
7.9 1.0 3.7 7.0 3.0 8.8
15.0 14.6 8.3
14.5 13.1 6.9
4.1 4.7 4.5 8.6 5.3 4.7
13.2 12.7 8.3
11.0 10.4 6.9
19.6 2.3 10.2 10.9 4.0 1.9
11.1 9.6 6.7
8.1 8.6 5.7
4.0 2.6 2.7 2.9 2.5 4.3
2.8 4.0 3.7
2.8 4.4 3.8
2.9 2.1 1.8 2.7 1.2 3.9
5.0 5.9 4.6
4.6 5.2 3.9
4.5 1.9 2.2 4.0 0.1 5.0
6.3 4.6 2.2
5.7 4.8 2.0
-0.2 -1.0 0.9 0.8 -0.8 2.0
2.3 3.1 2.2
1.2 1.3 1.3
3.9 2.1 2.5 2.8 6.9 5.0
4.2 4.0 2.6
6.0 3.3 2.5
United States
Note: See note 6 on concepts and sources where countries using full time equivalents are listed.
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Compensation of employees per head (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 27:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
0.1 0.8 -0.3 0.5 -2.4 1.6
-1.3 5.3 0.8
-1.7 3.4 1.4
-0.4 0.8 1.7 2.1 -0.2 0.0
-2.5 -0.4 3.0
-2.5 -1.4 1.5
8.4 -0.5 4.6 4.6 7.2 5.4
-7.3 1.0 2.0
-7.4 2.8 2.1
3.0 0.5 1.2 1.9 2.9 -1.2
-2.2 0.6 2.5
-2.4 0.2 2.3
1.3 -3.8 -1.4 -0.3 0.5 1.4
-6.7 -0.6 0.3
-3.5 -2.5 0.0
1.0 0.2 -0.1 2.1 2.8 -2.7
-4.5 0.7 1.0
-5.4 0.1 0.6
0.6 1.5 0.8 -1.0 -3.9 3.1
0.1 -0.4 0.4
-0.6 0.0 0.4
1.2 -1.4 -0.1 -0.7 0.7 7.9
-2.7 0.6 0.5
-2.1 0.3 1.5
0.5 0.0 0.2 1.2 3.7 -2.8
-4.5 -1.9 1.0
-4.1 -3.0 0.4
0.2 -0.6 0.0 4.1 0.5 2.9
-3.9 2.4 1.5
-3.0 2.7 1.3
Latvia
11.6 -1.3 6.0 4.7 4.2 7.4
-4.6 1.4 3.5
-5.3 -1.0 5.8
9.8 -1.7 5.6 8.2 5.4 7.0
-7.0 1.1 4.0
-6.7 -2.6 4.6
1.1 0.8 0.8 0.2 0.0 4.6
-0.2 3.8 1.0
-1.7 1.0 0.6
0.4 0.7 3.4 2.6 -1.5 3.3
-2.4 1.0 0.1
-2.0 -2.1 -0.6
0.6 0.9 0.0 0.1 2.1 -1.3
-3.3 0.0 1.7
-3.4 -2.1 0.8
0.5 0.0 0.4 1.0 0.3 0.4
-2.8 1.4 2.7
-4.1 -0.1 1.5
0.0 -0.3 0.1 3.9 0.9 2.7
-0.2 1.3 0.2
-1.3 0.4 0.9
3.5 1.0 3.1 4.0 1.7 3.5
-5.5 -0.1 2.3
-4.5 -6.7 5.2
2.9 -0.2 2.1 3.6 4.0 4.3
-6.6 1.2 1.7
-8.9 0.3 1.7
1.9 0.0 -0.2 0.3 0.1 1.8
-2.2 0.2 1.9
-3.2 -0.5 0.9
0.4 0.8 0.7 1.1 0.4 1.5
-2.3 0.0 1.6
-2.8 -0.9 1.0
4.5 6.6 4.8 4.8 7.8 5.0
1.6 2.8 5.1
4.0 1.4 2.6
2.8 0.4 3.7 4.3 0.2 2.1
-9.0 -4.0 2.4
-8.3 -4.9 0.8
1.6 0.3 1.0 1.0 2.2 0.9
-4.1 0.6 2.8
-6.0 0.0 2.5
2.8 -2.6 1.8 2.3 -0.3 2.3
-1.8 -1.5 4.1
-0.3 -2.2 2.9
1.1 2.1 4.1 6.3 1.7 -0.7
-1.1 0.3 1.7
-3.5 -1.9 2.0
10.4 -2.2 8.1 5.2 1.6 -3.1
-2.8 -0.3 1.9
-3.5 -1.7 -1.2
2.7 1.4 1.2 0.8 1.6 2.3
-4.0 -1.3 2.1
-5.1 -2.3 2.2
0.5 0.8 1.0 1.4 0.4 1.4
-2.4 -0.2 1.7
-3.1 -1.1 1.1
1.9 -0.1 1.1 2.3 -0.9 2.4
-1.5 -1.8 0.5
-3.3 -4.9 -0.2
0.0 -0.1 0.3 0.4 -1.2 1.4
-0.5 0.6 0.5
-1.2 -1.7 -0.5
1.1 0.7 1.2 1.3 5.7 0.9
-1.9 0.1 0.2
-0.2 -0.2 0.1
United States
¹ Deflated by the price deflator of private consumption.
Note: See note 6 on concepts and sources where countries using full time equivalents are listed.
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Real compensation of employees per head ¹ (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
European Economic Forecast, Spring 2023
172
Table 28:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
1.1 0.3 0.5 0.7 -5.4 4.4
1.2 0.6 0.5
1.0 -0.1 0.9
1.1 -0.1 0.7 0.1 -2.9 2.5
0.5 -0.4 1.2
0.4 -0.6 1.0
4.2 1.0 2.0 2.4 2.2 7.9
-5.6 -0.6 2.7
-2.9 0.8 1.6
0.5 2.3 7.0 2.4 9.3 7.1
5.0 3.0 4.0
4.6 2.4 2.5
1.2 -3.6 -1.1 -0.3 -7.3 5.6
2.0 1.6 1.2
4.0 0.6 1.3
0.6 2.4 0.3 -0.6 -4.1 -1.0
1.6 0.8 0.7
1.2 0.1 0.5
1.1 0.5 0.8 0.5 -7.2 4.3
0.2 0.4 1.0
1.6 0.5 1.0
2.1 0.7 0.5 0.3 -7.4 11.8
3.8 0.6 1.1
3.7 0.8 1.1
0.3 -0.1 0.2 0.4 1.5 -1.8
-0.1 0.4 0.5
0.4 0.1 0.0
1.1 -0.2 0.9 1.7 -3.2 5.3
2.7 0.6 0.8
4.0 0.3 0.5
Latvia
5.3 1.7 2.9 2.7 0.0 7.0
0.0 1.3 1.2
-1.5 -0.2 2.3
7.0 1.7 2.0 4.0 1.6 4.7
-3.0 1.2 3.0
-1.3 2.8 2.7
0.5 -0.7 -0.5 -1.2 -2.5 2.1
-1.9 -0.8 0.1
-1.5 -1.1 -0.3
1.3 0.5 1.7 1.2 -11.1 8.6
0.8 1.6 1.8
2.7 0.3 1.2
1.4 0.2 0.4 -0.2 -4.5 2.8
0.5 0.8 0.5
1.7 0.2 0.7
1.2 -0.3 0.4 0.4 -4.9 2.5
2.3 -0.2 0.7
2.1 -0.3 0.5
1.5 1.0 0.2 1.9 -6.6 3.5
4.6 1.9 1.1
5.6 0.5 1.2
5.5 1.6 1.3 1.4 -1.5 5.5
-0.1 1.2 2.0
0.0 0.5 2.1
3.4 -0.4 1.5 1.0 -3.7 6.8
2.9 0.5 1.7
3.3 0.5 1.1
1.7 -0.7 0.8 -0.6 -0.5 0.3
-0.4 0.4 1.0
0.2 0.4 1.1
1.1 0.5 0.7 0.3 -2.9 3.9
1.2 0.4 1.0
1.1 0.1 0.9
3.7 2.3 2.0 3.7 -1.7 7.4
2.1 1.2 2.1
2.7 1.1 2.1
3.8 0.2 2.4 2.8 -3.9 3.2
0.7 -0.5 2.1
2.1 -0.6 1.3
0.5 1.1 1.0 0.1 -0.9 2.3
0.0 0.7 1.7
-1.3 1.4 1.4
3.6 -0.6 1.0 3.7 -3.5 6.0
2.8 0.5 2.3
3.4 0.1 2.3
2.2 3.0 3.2 4.5 -2.0 4.3
4.7 0.6 2.4
2.6 0.6 2.2
8.4 1.2 4.7 3.7 -1.7 3.9
4.6 3.5 3.4
5.2 3.2 2.4
2.1 0.5 1.0 1.4 -0.8 4.1
-0.1 -0.7 0.9
0.0 -0.4 0.8
1.2 0.6 0.9 0.7 -3.0 3.9
1.5 0.5 1.2
1.4 0.2 1.0
0.9 0.1 0.8 0.5 -10.2 7.9
3.0 0.0 0.7
3.5 -0.5 0.4
0.6 0.7 0.1 -1.3 -3.8 2.2
0.9 1.2 1.1
1.5 1.4 1.0
1.6 1.3 0.7 1.0 3.2 2.5
-1.6 0.4 0.9
-1.9 0.9 1.3
United States
Note : See note 6 on concepts and sources where countries using full time equivalents are listed.
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Labour productivity (real GDP per occupied person) (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 29:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
1.7 1.9 0.5 1.3 4.1 -0.2
5.9 8.3 2.9
5.4 9.2 3.3
-0.1 2.2 1.9 3.3 3.4 0.6
3.7 5.9 4.1
4.1 6.0 3.2
10.0 1.5 4.5 4.7 3.9 1.8
14.8 11.0 2.0
12.9 8.8 3.1
4.6 -2.6 -4.4 1.3 -5.1 -4.2
-0.8 2.4 1.8
-1.0 3.6 2.6
3.5 0.3 -1.2 0.0 7.2 -3.1
-1.7 1.9 1.5
1.3 3.3 1.4
4.0 -0.9 0.3 3.8 7.2 0.3
0.4 3.9 2.8
1.4 4.8 2.2
1.8 1.7 0.6 -0.7 4.7 0.4
4.9 4.9 2.1
3.0 4.0 1.5
2.6 0.2 -0.6 0.1 9.4 -1.2
4.0 6.9 2.2
3.9 5.9 2.7
2.7 1.6 0.6 1.4 2.3 0.5
2.8 3.1 3.0
2.6 2.4 2.6
2.4 1.3 -1.5 2.7 2.8 -1.4
1.0 5.6 3.2
0.7 6.6 3.3
Latvia
16.8 -2.3 4.8 5.0 4.9 3.8
9.0 9.4 4.1
12.3 7.4 4.8
7.4 -0.6 4.8 6.3 4.9 6.8
14.0 9.1 3.1
12.4 3.4 3.9
3.3 3.1 2.7 3.1 3.8 3.9
7.4 7.8 3.3
6.7 5.9 3.3
1.8 2.4 2.6 3.2 12.0 -3.7
2.1 3.9 1.3
0.7 2.1 0.7
1.2 1.9 0.6 3.0 8.4 -0.6
3.3 4.7 4.3
1.6 4.3 3.5
1.4 2.3 1.7 2.3 7.1 0.3
2.2 8.5 5.9
2.1 6.9 4.4
1.7 -0.4 1.0 2.8 8.7 0.6
1.5 3.7 1.7
-0.9 3.8 1.7
2.4 1.4 2.4 5.3 5.4 1.3
6.2 8.4 5.3
7.6 5.5 7.2
3.0 1.7 1.0 3.9 7.3 1.1
1.4 7.2 3.6
-1.0 5.7 3.3
1.8 3.1 -0.1 1.9 0.9 3.3
3.6 4.1 2.7
3.2 3.1 1.5
1.7 1.5 0.9 1.9 4.6 0.0
3.2 5.0 3.2
3.0 4.8 2.7
6.2 5.8 5.3 3.1 9.0 3.6
16.0 12.2 6.8
12.3 7.8 4.4
1.8 1.4 2.6 4.3 7.3 1.8
4.8 7.8 4.4
5.5 7.1 5.0
3.0 1.0 0.5 1.9 3.5 0.6
3.0 4.2 3.5
4.6 3.2 3.5
4.1 1.6 2.7 3.1 6.7 2.6
11.9 14.0 5.8
10.7 13.0 4.6
1.9 1.7 1.2 3.9 7.5 0.4
8.1 12.1 5.8
8.1 9.8 4.6
10.4 1.1 5.2 6.9 5.8 -1.9
6.2 5.9 3.2
2.8 5.2 3.3
1.9 2.1 1.7 1.5 3.4 0.2
2.9 4.8 2.8
2.8 4.9 3.0
1.6 1.5 0.9 2.0 4.7 0.0
3.5 5.4 3.3
3.2 5.0 2.8
3.5 1.8 1.3 3.5 11.5 -2.7
3.1 4.6 1.5
2.1 5.4 1.6
-0.8 -1.7 0.8 2.1 3.1 -0.3
1.4 1.9 1.1
-0.3 -0.1 0.3
2.3 0.8 1.8 1.8 3.6 2.4
6.0 3.6 1.6
8.1 2.4 1.1
United States
¹ Compensation of employees per head divided by labour productivity per head, defined as GDP in volume divided by total employment.
Note: See note 6 on concepts and sources where countries using full time equivalents are listed.
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Unit labour costs, whole economy ¹ (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Statistical Annex
173
Table 30:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
-0.3 0.4 -1.0 -0.4 2.5 -2.9
0.0 4.3 0.5
-1.3 4.0 0.1
-1.0 0.8 0.2 1.1 1.6 -2.4
-1.7 -0.2 1.6
-1.2 -0.7 -0.4
2.1 -1.5 1.5 1.4 4.4 -3.9
-1.5 0.6 -1.5
-1.2 1.8 0.1
3.0 -2.1 -6.4 -2.2 -3.6 -4.8
-5.8 -2.0 -0.7
-9.8 -1.7 -1.7
0.2 0.2 -0.6 -0.2 8.2 -4.3
-9.1 -2.6 -1.3
-7.1 -2.2 -1.0
0.4 -1.0 -0.4 2.3 5.9 -1.9
-3.7 -0.5 -0.1
-2.0 0.5 -0.1
-0.3 0.9 -0.1 -2.0 1.9 -0.9
1.8 -0.4 -0.5
0.2 -0.9 -2.3
-1.4 -1.3 -1.2 -1.9 8.6 -3.2
-3.9 -0.5 -1.0
-1.5 -0.3 0.3
0.3 0.4 -0.4 0.5 0.7 -0.1
-0.3 -2.7 0.4
-0.6 -0.9 0.1
-0.9 0.4 -1.3 1.4 4.1 -4.1
-5.1 0.6 0.3
-3.7 2.2 0.7
3.9 -2.5 2.8 2.3 3.9 -2.6
-3.6 0.5 1.3
1.2 1.1 1.0
0.4 -2.2 2.7 3.5 3.0 0.5
-2.4 -1.2 0.0
-3.5 -5.1 1.6
-1.2 0.2 1.0 1.7 -0.8 -2.2
0.9 2.2 -0.1
0.9 1.7 0.4
-0.6 0.2 0.1 0.8 10.3 -5.5
-3.0 -0.3 -1.7
-4.1 -1.8 -2.1
-0.8 1.0 -0.4 -0.1 6.3 -3.0
-1.9 -1.3 1.6
-1.7 -0.7 -0.8
-0.6 0.6 -0.1 0.8 4.4 -1.7
-2.6 1.3 1.7
-3.7 1.1 0.6
-1.0 -1.1 -0.6 1.1 6.6 -0.9
-2.9 -2.0 -0.6
-4.3 -1.4 -0.8
-0.6 0.8 2.0 2.7 3.0 -1.0
-1.3 -1.3 -0.3
0.1 -5.9 2.1
-0.1 0.6 -0.2 1.7 6.0 -1.5
-5.5 -0.1 -0.8
-7.2 -0.5 -0.4
0.2 1.0 -1.3 0.4 -0.7 1.1
-0.6 -0.2 0.3
-2.0 -0.5 -0.7
-0.4 0.5 -0.3 0.2 2.3 -2.1
-1.4 -0.6 0.5
-1.5 -0.5 -0.7
-1.3 3.4 1.9 -2.0 4.5 -3.3
0.8 1.6 2.8
0.0 3.5 0.7
-0.2 0.6 0.8 0.4 2.8 -1.5
-3.5 -3.1 -1.0
-3.4 -0.9 0.2
0.3 -0.5 -0.2 0.8 0.9 -2.1
-4.3 4.0 1.4
1.2 -1.1 0.8
-0.2 -1.2 -0.6 -1.6 0.3 -3.6
-2.9 0.9 2.2
1.4 2.7 -0.4
-1.5 -0.5 0.3 0.9 3.1 -4.6
-2.9 0.3 0.0
-4.1 -0.4 -0.4
-3.1 -2.6 1.5 0.1 1.6 -6.8
-6.3 -4.3 -2.5
-7.7 -4.4 -4.3
0.1 0.8 -0.3 -1.0 1.3 -2.6
-2.7 -0.8 1.2
-3.2 -0.3 1.1
-0.6 0.3 -0.4 0.0 2.3 -2.3
-1.8 -0.7 0.4
-1.9 -0.6 -0.7
0.6 -0.1 -0.1 1.4 5.3 -2.7
-2.2 -0.5 -0.3
-3.1 -2.0 -0.6
0.2 -0.7 0.0 1.5 2.1 0.0
1.1 -1.5 -1.3
-0.8 -2.6 -1.7
-0.4 -0.7 0.1 0.0 2.3 -2.0
-1.0 -0.2 -0.8
1.1 -0.9 -1.2
United States
¹ Nominal unit labour costs divided by GDP price deflator.
Note: See note 6 on concepts and sources where countries using full time equivalents are listed.
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Latvia
Real unit labour costs ¹ (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 31:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
Latvia
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
: : :
: : :
: : : : : :
:
: : :
: : :
1.9553 1.9558 1.9558 1.9558 1.9558 1.9558
1.9558 1.9558 1.9558
1.9558 1.9558 1.9558
28.5248 25.4858 26.7625 25.6705 26.4551 25.6385
24.5647 23.5129 23.4208
24.6008 24.5360 24.5360
7.4515 7.4492 7.4501 7.4661 7.4542 7.4370
7.4396 7.4496 7.4518
7.4396 7.4385 7.4385
253.3236 284.1829 311.6277 325.2967 351.2494 358.4616
391.3229 378.4623 374.9670
392.2972 413.3300 413.3300
3.9477 4.1650 4.2500 4.2976 4.4430 4.5649
4.6898 4.6452 4.6227
4.7030 4.7881 4.7881
3.6429 4.3138 4.5204 4.7453 4.8383 4.9214
4.9312 4.9330 4.9373
4.9308 4.9150 4.9150
9.3051 9.3059 9.5622 10.5891 10.4848 10.1461
10.6314 11.2961 11.3273
10.5590 10.9876 10.9876
: : : : : :
:
: : :
: : :
0.7050 0.8554 0.8225 0.8778 0.8897 0.8595
0.8529 0.8829 0.8830
0.8464 0.8695 0.8695
146.0047 117.6698 130.2843 122.0058 121.8458 129.8621
138.0384 145.7621 147.1060
137.3981 146.4490 146.4490
1.3169 1.3451 1.1711 1.1195 1.1422 1.1824
1.0531 1.0917 1.0983
1.0355 0.9838 0.9838
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Italy
Cyprus
Lithuania
Croatia
Nominal bilateral exchange rates against ecu/euro (2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
European Economic Forecast, Spring 2023
174
Table 32:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
0.9 -0.2 0.8 -0.6 1.9 0.6
-1.6 2.3 0.3
-1.8 -0.2 0.0
1.0 -0.3 0.9 -0.9 2.4 0.8
-2.4 2.8 0.3
-2.4 -0.4 0.0
0.8 0.1 2.5 -0.3 2.5 0.6
-1.9 3.6 0.5
-2.2 -1.2 0.0
1.9 -0.6 0.1 -2.0 1.8 1.0
-4.5 2.8 0.4
-5.2 -1.1 0.0
0.8 0.3 2.0 0.0 3.3 2.0
0.7 3.3 0.4
1.3 -0.2 0.0
0.8 -0.1 0.9 -0.5 2.2 0.7
-1.5 2.2 0.3
-1.5 -0.2 0.0
1.0 -0.4 0.7 -0.9 2.1 0.7
-2.2 2.6 0.3
-2.5 -0.2 0.0
1.5 -0.8 2.1 -0.2 0.7 1.1
-0.7 2.2 0.3
-1.1 -0.7 0.0
1.0 -0.3 1.0 -0.8 2.3 1.0
-2.0 2.6 0.3
-1.4 -0.5 0.0
0.9 -0.2 0.8 -0.9 2.8 0.6
-2.3 3.7 0.5
-2.6 -0.4 0.0
-1.3 0.5 2.9 -0.4 3.5 1.0
-2.5 4.5 0.7
-2.6 -2.2 0.0
0.6 0.6 3.4 -0.6 3.7 1.2
-3.0 4.6 0.7
-2.8 -2.5 0.0
0.5 -0.1 0.6 -0.4 1.5 0.4
-1.0 1.7 0.2
-1.0 -0.1 0.0
1.5 -0.9 0.3 -1.2 1.7 0.9
-1.4 2.6 0.4
-0.7 0.2 0.0
0.8 -0.1 0.7 -0.5 1.8 0.4
-1.4 2.2 0.2
-1.5 -0.1 0.0
0.5 -0.1 0.8 -0.6 1.8 0.6
-1.7 1.8 0.2
-0.8 -0.3 0.0
0.7 -0.2 0.6 -0.4 1.7 0.5
-1.3 1.7 0.2
-1.5 -0.2 0.0
6.0 1.2 1.0 -0.2 1.8 0.5
-1.0 1.4 0.2
-0.2 -0.2 0.0
-0.3 0.4 1.3 -0.2 1.9 0.8
-1.0 1.7 0.2
8.3 -0.6 0.0
1.1 -0.3 1.7 -0.6 2.5 0.5
-2.3 3.7 0.5
-2.7 -0.6 0.0
Euro area
2.0 -0.5 1.5 -1.3 3.8 1.3
-3.4 4.4 0.5
: : :
2.0 -0.5 1.5 -1.3 3.8 1.2
-3.4 4.4 0.5
-2.0 -0.4 0.0
0.6 0.6 2.1 0.4 3.2 2.1
1.4 3.1 0.3
2.1 -0.1 0.0
5.3 -0.6 1.3 -0.3 -1.3 3.8
3.7 6.3 0.6
3.9 0.0 0.0
0.9 -0.5 1.1 -0.6 2.4 0.4
-1.9 3.3 0.3
-2.2 0.1 0.0
0.5 -3.0 -0.4 -2.1 -5.7 -1.4
-9.2 5.2 1.2
-7.0 -5.5 0.0
5.2 -3.1 1.0 -1.1 -1.4 -2.3
-3.9 3.1 0.8
-3.8 -2.3 0.0
1.2 -3.1 0.4 -2.0 0.4 -0.6
0.0 2.1 0.1
0.6 0.2 0.0
0.0 1.9 -2.4 -3.6 3.6 3.5
-6.6 -2.8 0.1
-6.3 -4.0 0.0
2.8 -1.0 1.7 -2.0 4.1 1.6
-4.6 5.6 0.7
-2.7 -0.6 0.0
-1.4 -2.0 -0.1 -0.3 0.8 4.5
-2.2 -0.5 0.4
-2.0 -3.3 0.0
-0.3 1.9 -0.1 5.1 2.8 -6.2
-11.7 -1.2 -0.3
-12.1 -6.8 0.0
-3.8 0.7 4.5 3.7 2.6 -3.9
7.3 -0.8 -0.2
8.2 5.2 0.0
United States
1) 42 countries: EU-27, TR, CH, NO, US, UK, CA, JP, AU, MX, NZ, KO, CN, HK, RU and BR.
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Bulgaria
Czechia
Denmark
Euro area 19
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Latvia
Nominal effective exchange rates to rest of a group ¹ of industrialised countries (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 33:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
49.9 55.3 53.3 51.9 58.9 55.4
53.5 55.2 55.2
54.2 55.6 54.4
45.3 46.3 44.3 45.0 50.4 51.3
49.7 48.3 47.7
49.5 49.1 47.9
34.9 40.2 39.0 39.4 44.9 41.5
39.4 41.5 40.3
40.3 41.8 41.5
35.3 48.4 29.2 24.3 27.3 24.8
21.4 20.4 19.4
22.2 20.7 19.6
47.2 56.3 50.4 48.1 60.1 57.7
52.5 49.0 47.2
54.4 52.4 45.5
39.3 46.9 43.0 42.3 51.9 50.6
47.8 47.6 47.1
48.7 47.9 46.6
53.0 56.9 56.6 55.4 61.3 59.1
58.1 57.1 56.6
57.9 58.1 57.0
46.1 48.5 46.4 46.3 54.1 48.7
44.8 45.8 46.0
47.2 47.4 48.0
47.3 50.4 49.5 48.5 57.0 57.3
56.7 52.5 51.0
54.1 53.3 52.1
38.5 42.2 41.2 38.1 44.6 43.5
39.8 40.2 40.6
40.2 40.4 40.4
Latvia
35.8 42.1 38.6 38.3 42.3 44.2
40.2 40.1 39.3
43.3 40.6 38.2
35.2 40.3 34.3 34.7 42.6 37.5
36.5 37.6 37.1
37.6 39.9 37.8
40.4 41.9 40.9 43.1 46.8 42.9
43.3 44.7 43.5
43.3 44.7 43.5
41.9 41.2 37.2 35.9 45.8 44.0
40.9 40.7 38.8
43.1 42.5 39.8
43.2 47.4 43.9 42.1 47.8 46.7
44.5 45.7 45.2
44.8 46.8 44.9
50.9 52.1 50.3 48.7 56.8 56.1
52.7 51.6 50.1
52.3 51.7 51.0
45.6 50.2 46.7 42.5 49.2 47.7
44.8 44.5 44.3
45.9 45.5 45.0
38.0 42.3 42.1 40.5 44.7 45.6
42.3 47.7 44.4
45.0 47.1 44.7
45.4 52.0 46.7 43.4 51.4 49.5
45.5 46.3 44.7
46.6 48.2 45.5
48.1 54.8 55.3 53.3 57.2 55.8
53.4 55.0 55.0
53.5 54.2 53.6
46.6 50.3 47.9 46.9 53.5 52.6
50.8 49.6 48.8
50.5 50.4 49.0
36.6 36.2 38.0 36.3 41.5 41.6
41.3 42.2 42.2
43.7 43.0 41.9
41.5 43.7 40.8 41.1 47.2 46.5
44.6 44.3 42.1
45.2 46.0 43.2
50.8 56.7 52.7 49.7 53.5 50.8
45.3 46.7 46.8
48.2 47.9 47.8
49.6 49.5 48.0 46.1 51.1 48.3
47.8 47.3 46.0
49.3 49.0 47.7
43.8 44.5 41.8 41.9 48.2 44.1
43.5 46.6 44.8
44.1 46.3 45.0
35.6 37.9 34.9 36.0 41.5 39.8
39.7 39.2 38.2
39.7 38.0 36.8
51.0 51.1 49.8 49.1 52.1 49.4
48.1 48.8 47.5
48.9 48.0 47.7
46.6 49.9 47.5 46.6 52.8 51.7
49.8 49.0 48.1
49.8 49.7 48.4
41.4 45.9 41.7 40.6 52.1 48.4
46.4 44.5 44.0
46.7 44.4 43.7
34.9 40.1 38.8 38.8 46.1 44.3
45.2 43.1 40.8
44.7 42.0 40.6
37.5 41.4 38.1 38.5 47.3 44.9
38.4 38.8 39.0
39.7 40.1 40.2
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Total expenditure, general government (as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Statistical Annex
175
Table 34:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
49.1 51.0 51.5 49.9 49.9 49.9
49.7 50.2 50.5
48.9 49.8 49.3
43.7 44.6 45.5 46.5 46.1 47.5
47.1 46.0 46.5
47.2 46.0 45.3
36.2 40.0 38.9 39.5 39.4 39.0
38.5 38.4 37.6
38.0 38.1 38.2
35.1 33.5 27.9 24.7 22.3 23.2
23.0 22.1 21.6
22.3 21.5 20.8
39.7 44.4 48.8 49.0 50.4 50.6
50.2 47.7 46.5
50.3 50.5 44.7
39.4 36.9 38.7 39.2 41.8 43.7
43.0 43.5 43.8
44.1 43.6 43.0
49.9 51.3 53.3 52.3 52.4 52.6
53.4 52.4 52.3
52.9 52.8 51.9
43.1 42.0 44.6 46.5 46.8 46.2
45.2 45.3 44.7
45.7 45.1 45.2
44.3 46.6 47.0 47.0 47.3 48.3
48.8 48.0 47.3
49.0 49.7 47.9
37.9 36.7 39.0 39.4 38.8 41.5
41.9 42.1 42.7
41.3 41.6 42.0
Latvia
34.4 37.1 37.7 37.7 37.9 37.1
35.8 36.3 36.6
36.3 37.2 36.9
34.0 34.2 34.3 35.2 36.1 36.4
35.8 35.9 35.8
35.8 35.5 36.0
42.0 42.1 42.7 45.4 43.3 43.6
43.5 43.0 42.0
43.2 43.0 43.0
38.8 38.4 38.0 36.4 36.2 36.1
35.1 35.6 34.3
37.0 36.8 35.4
42.7 43.0 43.6 43.9 44.1 44.3
44.5 43.6 43.6
43.8 42.8 41.9
48.3 48.9 49.2 49.2 48.8 50.3
49.5 49.1 48.8
48.8 48.9 49.1
41.0 42.1 43.3 42.6 43.4 44.9
44.4 44.4 44.2
44.0 44.4 44.2
35.3 36.9 40.0 39.3 39.4 40.1
40.2 41.6 39.6
40.8 41.3 40.1
44.2 44.7 44.7 44.1 43.7 44.9
42.5 42.6 41.8
43.0 43.0 42.7
51.8 52.6 53.6 52.4 51.6 53.0
52.6 52.5 52.5
52.1 51.9 51.4
44.6 45.5 46.4 46.3 46.4 47.3
47.1 46.4 46.3
47.1 46.7 45.7
38.1 33.9 37.3 38.4 37.7 37.7
38.5 37.4 37.4
40.4 40.2 39.4
39.5 40.2 40.9 41.3 41.5 41.4
41.0 40.7 39.2
40.8 41.9 40.2
54.9 54.2 53.1 53.8 53.8 54.4
48.6 49.0 48.1
49.9 48.4 48.2
43.1 45.7 45.8 44.0 43.6 41.2
41.6 43.4 41.7
43.1 44.6 42.5
40.2 38.9 39.7 41.1 41.3 42.3
39.8 41.7 41.1
39.3 40.8 39.9
33.2 32.3 33.0 31.6 32.3 32.7
33.5 34.4 33.9
33.1 33.0 32.1
52.9 50.3 50.1 49.7 49.3 49.4
48.9 47.9 47.0
49.1 48.2 47.7
44.8 45.4 46.2 46.0 46.1 46.9
46.5 45.9 45.7
46.4 46.1 45.2
38.1 37.8 38.1 38.4 39.3 40.3
41.1 41.3 41.6
40.3 40.0 40.0
30.9 31.4 35.1 35.7 37.0 38.1
37.2 36.7 36.4
37.8 37.3 37.1
32.5 31.1 33.0 31.8 32.4 32.9
34.4 33.8 33.6
33.8 33.5 33.1
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Total revenue, general government (as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 35:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
-0.7 -4.3 -1.9 -2.0 -9.0 -5.5
-3.9 -5.0 -4.7
-5.2 -5.8 -5.1
-1.6 -1.7 1.2 1.5 -4.3 -3.7
-2.6 -2.3 -1.2
-2.3 -3.1 -2.6
1.3 -0.2 -0.1 0.1 -5.5 -2.4
-0.9 -3.1 -2.7
-2.3 -3.7 -3.3
-0.2 -14.9 -1.3 0.5 -5.0 -1.6
1.6 1.7 2.2
0.2 0.8 1.2
-7.6 -11.9 -1.6 0.9 -9.7 -7.1
-2.3 -1.3 -0.6
-4.1 -1.8 -0.8
0.1 -9.9 -4.3 -3.1 -10.1 -6.9
-4.8 -4.1 -3.3
-4.6 -4.3 -3.6
-3.1 -5.7 -3.3 -3.1 -9.0 -6.5
-4.7 -4.7 -4.3
-5.0 -5.3 -5.1
-3.0 -6.5 -1.8 0.2 -7.3 -2.5
0.4 -0.5 -1.3
-1.6 -2.4 -2.7
-3.0 -3.8 -2.5 -1.5 -9.7 -9.0
-8.0 -4.5 -3.7
-5.1 -3.6 -4.2
-0.6 -5.4 -2.2 1.3 -5.8 -2.0
2.1 1.8 2.1
1.1 1.1 1.6
Latvia
-1.4 -5.0 -0.9 -0.6 -4.4 -7.1
-4.4 -3.8 -2.7
-7.1 -3.4 -1.3
-1.2 -6.2 0.1 0.5 -6.5 -1.2
-0.6 -1.7 -1.4
-1.9 -4.4 -1.8
1.6 0.3 1.8 2.2 -3.4 0.7
0.2 -1.7 -1.5
-0.1 -1.7 -0.5
-3.1 -2.8 0.8 0.5 -9.7 -7.8
-5.8 -5.1 -4.5
-6.0 -5.7 -4.4
-0.5 -4.4 -0.2 1.8 -3.7 -2.4
0.0 -2.1 -1.7
-1.1 -4.0 -3.1
-2.5 -3.3 -1.2 0.6 -8.0 -5.8
-3.2 -2.4 -1.3
-3.4 -2.8 -1.9
-4.6 -8.0 -3.4 0.1 -5.8 -2.9
-0.4 -0.1 -0.1
-1.9 -1.1 -0.8
-2.7 -5.4 -2.1 -1.2 -5.4 -5.4
-2.0 -6.1 -4.8
-4.2 -5.8 -4.7
-1.2 -7.3 -1.9 0.7 -7.7 -4.6
-3.0 -3.7 -2.9
-3.6 -5.2 -2.7
3.6 -2.1 -1.7 -0.9 -5.6 -2.8
-0.9 -2.6 -2.6
-1.4 -2.3 -2.3
-2.0 -4.7 -1.5 -0.6 -7.1 -5.3
-3.6 -3.2 -2.4
-3.5 -3.7 -3.3
1.5 -2.3 -0.7 2.1 -3.8 -3.9
-2.8 -4.8 -4.8
-3.4 -2.8 -2.5
-2.0 -3.5 0.1 0.3 -5.8 -5.1
-3.6 -3.6 -3.0
-4.3 -4.1 -3.0
4.0 -2.5 0.5 4.1 0.2 3.6
3.3 2.3 1.3
1.8 0.5 0.4
-6.5 -3.9 -2.2 -2.0 -7.5 -7.1
-6.2 -4.0 -4.4
-6.2 -4.4 -5.2
-3.6 -5.6 -2.1 -0.7 -6.9 -1.8
-3.7 -5.0 -3.7
-4.8 -5.5 -5.2
-2.4 -5.7 -1.9 -4.3 -9.2 -7.1
-6.2 -4.7 -4.4
-6.5 -5.0 -4.8
1.9 -0.8 0.3 0.6 -2.8 0.0
0.7 -0.9 -0.5
0.2 0.2 0.0
-1.8 -4.6 -1.4 -0.5 -6.7 -4.8
-3.4 -3.1 -2.4
-3.4 -3.6 -3.2
-3.3 -8.1 -3.6 -2.2 -12.8 -8.1
-5.2 -3.2 -2.4
-6.4 -4.4 -3.7
-4.1 -8.7 -3.7 -3.0 -9.1 -6.2
-8.0 -6.5 -4.4
-6.9 -4.7 -3.4
-5.0 -10.3 -5.1 -6.7 -14.9 -12.1
-4.0 -5.0 -5.5
-5.9 -6.7 -7.1
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Net lending (+) or net borrowing (-), general government (as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
European Economic Forecast, Spring 2023
176
Table 36:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
4.3 3.5 2.6 2.0 2.0 1.7
1.5 1.7 2.0
1.5 1.6 1.7
2.7 2.3 1.2 0.8 0.6 0.6
0.7 0.8 0.9
0.6 0.7 0.8
0.2 0.1 0.0 0.0 0.0 0.0
0.1 0.4 0.6
0.1 0.3 0.4
1.1 3.3 2.5 1.3 1.0 0.8
0.7 0.6 0.6
0.7 0.7 0.7
4.6 5.6 3.5 3.0 3.0 2.5
2.4 3.2 3.2
2.4 3.0 3.0
1.7 2.5 2.9 2.3 2.2 2.2
2.4 2.5 2.4
2.2 2.3 2.2
2.7 2.5 1.9 1.4 1.3 1.4
1.9 2.0 2.0
1.8 2.5 2.9
1.7 2.7 3.0 2.2 2.0 1.5
1.4 1.2 1.2
1.3 1.1 1.1
4.6 4.7 4.0 3.4 3.5 3.6
4.4 4.0 4.1
4.0 4.0 4.1
2.9 2.6 2.8 2.2 2.1 1.8
1.5 1.3 1.3
1.5 1.3 1.2
Latvia
0.5 1.7 1.0 0.7 0.6 0.5
0.5 0.6 0.8
0.5 0.6 0.5
0.7 1.7 1.3 0.9 0.7 0.4
0.4 0.5 0.6
0.3 0.4 0.6
0.2 0.5 0.4 0.3 0.2 0.2
0.2 0.3 0.3
0.2 0.2 0.3
3.6 3.0 2.1 1.3 1.3 1.1
1.0 1.2 1.5
1.1 1.3 1.3
2.1 1.8 1.2 0.8 0.7 0.6
0.5 0.7 0.7
0.6 0.6 0.6
3.1 2.8 2.1 1.4 1.3 1.1
0.9 1.1 1.3
1.1 1.1 1.2
2.8 4.0 4.1 3.0 2.9 2.4
2.0 2.2 2.7
2.1 2.5 2.5
1.6 1.6 1.6 1.2 1.2 1.1
1.0 1.1 1.2
1.0 1.0 1.1
1.4 1.9 2.8 1.7 1.6 1.2
1.1 1.2 1.3
1.1 1.1 1.1
1.5 1.3 1.1 0.9 0.7 0.5
0.5 0.8 1.2
0.6 0.7 0.8
2.9 2.9 2.2 1.6 1.5 1.5
1.7 1.7 1.8
1.6 1.8 1.9
1.3 0.7 0.8 0.6 0.5 0.5
0.5 0.5 0.6
0.5 0.5 0.5
1.0 1.3 0.9 0.7 0.8 0.8
1.2 1.3 1.3
1.1 1.2 1.2
1.9 1.9 1.2 0.7 0.6 0.6
0.7 0.6 0.5
0.6 0.5 0.5
4.1 4.4 3.1 2.2 2.3 2.3
2.8 3.9 4.3
2.9 3.1 3.4
2.4 2.6 1.7 1.4 1.3 1.1
1.6 2.0 2.1
1.7 2.8 2.9
1.0 2.0 1.4 1.0 1.2 1.1
1.2 1.8 1.7
1.8 2.0 2.2
1.7 1.1 0.5 0.4 0.3 0.2
0.5 0.7 0.6
0.3 0.4 0.3
2.8 2.8 2.0 1.5 1.4 1.4
1.6 1.7 1.8
1.5 1.7 1.9
2.0 2.7 2.5 2.1 1.9 2.7
4.4 4.3 4.3
3.3 3.2 3.2
1.9 1.9 1.7 1.5 1.5 1.4
1.4 1.4 1.4
1.4 1.4 1.4
3.9 4.2 3.9 4.1 3.9 3.7
3.8 4.1 4.4
3.5 3.8 4.2
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Interest expenditure, general government (as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 37:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
3.5 -0.7 0.8 0.0 -7.0 -3.8
-2.4 -3.3 -2.8
-3.7 -4.2 -3.4
1.1 0.7 2.4 2.3 -3.7 -3.2
-1.9 -1.5 -0.3
-1.7 -2.4 -1.8
1.5 -0.1 -0.1 0.1 -5.4 -2.4
-0.8 -2.7 -2.1
-2.2 -3.4 -2.9
0.9 -11.5 1.2 1.8 -4.0 -0.8
2.2 2.3 2.8
0.9 1.5 1.9
-2.9 -6.3 1.9 3.9 -6.7 -4.7
0.1 1.9 2.5
-1.6 1.1 2.2
1.8 -7.4 -1.4 -0.8 -7.9 -4.7
-2.4 -1.6 -0.9
-2.4 -2.0 -1.4
-0.3 -3.1 -1.4 -1.6 -7.7 -5.1
-2.8 -2.7 -2.3
-3.2 -2.8 -2.1
-1.3 -3.8 1.1 2.4 -5.3 -0.9
1.8 0.7 -0.2
-0.3 -1.2 -1.6
1.6 0.9 1.5 1.9 -6.2 -5.5
-3.6 -0.5 0.5
-1.1 0.4 -0.1
2.3 -2.8 0.5 3.5 -3.7 -0.2
3.6 3.2 3.4
2.6 2.5 2.9
Latvia
-0.9 -3.3 0.1 0.1 -3.7 -6.7
-3.9 -3.2 -1.9
-6.6 -2.8 -0.8
-0.4 -4.4 1.3 1.3 -5.8 -0.7
-0.3 -1.3 -0.7
-1.6 -4.0 -1.2
1.9 0.7 2.2 2.6 -3.2 0.9
0.3 -1.5 -1.1
0.1 -1.5 -0.3
0.5 0.2 2.9 1.8 -8.4 -6.7
-4.8 -3.9 -3.1
-4.9 -4.4 -3.1
1.6 -2.6 0.9 2.6 -3.0 -1.8
0.6 -1.4 -1.0
-0.5 -3.4 -2.5
0.5 -0.5 0.9 2.0 -6.6 -4.7
-2.2 -1.3 -0.1
-2.3 -1.7 -0.7
-1.8 -4.1 0.7 3.1 -2.9 -0.5
1.6 2.0 2.6
0.2 1.4 1.7
-1.0 -3.8 -0.4 0.0 -4.2 -4.3
-1.0 -5.0 -3.6
-3.2 -4.8 -3.6
0.2 -5.4 0.9 2.4 -6.1 -3.4
-1.9 -2.5 -1.6
-2.5 -4.1 -1.6
5.1 -0.8 -0.6 -0.1 -4.9 -2.2
-0.3 -1.7 -1.3
-0.8 -1.6 -1.4
1.0 -1.9 0.7 1.0 -5.6 -3.9
-1.9 -1.4 -0.6
-1.9 -1.9 -1.4
2.8 -1.5 0.1 2.7 -3.3 -3.4
-2.3 -4.3 -4.2
-2.9 -2.3 -2.0
-1.0 -2.2 1.0 1.0 -5.0 -4.3
-2.5 -2.3 -1.6
-3.3 -2.9 -1.8
5.9 -0.6 1.6 4.9 0.8 4.2
4.1 2.9 1.8
2.3 1.0 0.9
-2.4 0.5 0.9 0.2 -5.2 -4.9
-3.5 -0.1 -0.1
-3.2 -1.3 -1.9
-1.2 -3.0 -0.4 0.6 -5.6 -0.7
-2.2 -3.0 -1.7
-3.1 -2.8 -2.3
-1.4 -3.6 -0.6 -3.3 -8.0 -6.0
-5.0 -2.9 -2.7
-4.7 -3.1 -2.6
3.6 0.3 0.8 1.0 -2.5 0.2
1.2 -0.2 0.1
0.6 0.6 0.3
1.0 -1.8 0.7 1.0 -5.3 -3.4
-1.8 -1.4 -0.7
-1.8 -1.8 -1.4
-1.3 -5.4 -1.1 -0.1 -10.9 -5.3
-0.8 1.1 1.9
-3.1 -1.2 -0.6
-2.1 -6.8 -2.0 -1.6 -7.6 -4.8
-6.5 -5.0 -3.0
-5.5 -3.3 -2.1
-1.0 -6.1 -1.3 -2.6 -11.0 -8.4
-0.2 -0.9 -1.0
-2.4 -2.8 -2.9
United States
¹ Net lending/borrowing excluding interest expenditure.
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Primary balance, general government ¹ (as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Statistical Annex
177
Table 38:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
-1.5 -3.7 -1.9 -2.8 -5.7 -4.9
-4.2 -5.0 -4.6
-5.6 -5.3 -4.5
-1.7 -1.1 0.9 0.9 -2.7 -3.0
-2.5 -2.0 -1.0
-2.3 -2.4 -2.2
-1.8 2.1 -0.3 -0.5 -4.1 -3.3
0.0 -1.2 -1.3
-1.6 -2.5 -2.3
-0.9 -13.9 -2.3 2.6 -1.8 -1.7
-0.8 -0.1 1.0
-2.4 -0.8 0.3
-8.5 -5.6 5.0 4.1 -2.4 -3.9
-1.7 -1.5 -1.0
-3.1 -1.1 -0.5
-1.7 -6.1 -2.3 -4.2 -4.3 -3.7
-4.0 -3.7 -3.2
-3.8 -3.6 -3.4
-4.1 -4.5 -2.8 -4.4 -4.9 -5.7
-4.8 -4.5 -4.3
-5.1 -5.0 -5.0
-4.8 -5.4 -1.3 -0.9 -3.5 -2.9
-1.3 -1.3 -1.9
-3.1 -3.1 -3.1
-4.2 -2.4 -1.3 -1.8 -5.1 -8.0
-8.3 -5.1 -4.4
-5.5 -3.9 -4.5
-2.6 -4.1 -1.0 -1.3 -4.5 -2.4
0.7 0.9 1.3
-0.7 0.2 1.1
-3.5 -2.8 -1.5 -1.4 -3.3 -6.5
-4.2 -3.5 -2.6
-6.9 -2.5 -0.8
-3.2 -3.9 -0.6 -1.0 -6.4 -1.6
-0.4 -0.6 -0.3
-1.8 -3.5 -0.9
0.9 1.4 2.0 2.5 -2.0 0.8
0.5 -1.1 -0.8
0.2 -0.8 0.3
-3.2 -2.0 -0.5 -1.3 -5.3 -7.1
-5.5 -4.6 -3.9
-6.0 -5.2 -3.8
-0.5 -3.0 0.1 0.9 -1.3 -1.7
-0.7 -2.7 -1.9
-2.1 -4.3 -3.1
-2.9 -2.8 -1.1 -0.7 -4.9 -4.4
-3.8 -2.5 -1.5
-4.1 -2.9 -1.8
-4.3 -6.7 -3.0 -1.5 -2.2 -1.1
-1.1 -1.1 -0.8
-2.8 -1.4 -1.0
-3.6 -4.8 -2.0 -2.0 -4.3 -5.5
-2.0 -5.8 -4.5
-4.3 -5.5 -4.4
-3.5 -5.3 -0.9 -0.9 -6.2 -5.6
-5.0 -4.9 -3.7
-5.8 -6.4 -3.4
2.6 -0.8 -1.0 -1.2 -3.9 -2.3
-0.6 -1.8 -1.9
-1.1 -1.5 -1.6
-2.7 -3.3 -0.9 -1.4 -3.8 -4.3
-3.8 -3.2 -2.6
-3.7 -3.4 -3.2
0.9 -2.3 -0.5 1.7 -2.4 -4.0
-3.2 -5.0 -5.0
-3.8 -2.9 -2.8
-3.5 -2.9 -0.1 -0.8 -4.1 -4.5
-3.2 -2.7 -2.4
-4.0 -3.1 -2.1
2.3 -0.5 1.3 4.5 2.6 4.4
3.1 3.0 2.1
1.6 1.2 1.2
-7.7 -2.1 -2.8 -3.8 -5.7 -6.8
-6.4 -3.2 -3.8
-6.7 -3.7 -4.5
-3.8 -5.8 -2.0 -2.1 -5.5 -2.0
-4.7 -4.5 -2.9
-5.2 -4.7 -4.2
-4.1 -4.9 -1.8 -4.8 -7.4 -6.2
-5.8 -4.3 -4.1
-6.3 -4.6 -4.3
1.1 0.4 0.3 0.4 -0.7 0.3
0.6 0.1 0.7
-0.1 1.0 1.1
-2.6 -3.2 -0.9 -1.3 -3.7 -3.9
-3.5 -3.0 -2.4
-3.6 -3.2 -3.0
Poland
Romania
Sweden
EU
¹ Cyclically-adjusted variables for Croatia are based on provisional values for fiscal semi-elasticities and subject to further revisions
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Latvia
Cyclically-adjusted net lending (+) or net borrowing (-), general government¹ (as a percentage of potential GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 39:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
2.8 -0.1 0.7 -0.8 -3.7 -3.2
-2.6 -3.3 -2.7
-4.1 -3.7 -2.8
1.0 1.2 2.1 1.7 -2.1 -2.4
-1.8 -1.2 -0.1
-1.6 -1.7 -1.4
-1.6 2.2 -0.3 -0.5 -4.0 -3.3
0.1 -0.7 -0.7
-1.6 -2.2 -1.9
0.2 -10.6 0.2 3.9 -0.8 -1.0
-0.1 0.5 1.6
-1.7 -0.1 1.0
-3.8 0.0 8.5 7.1 0.5 -1.4
0.7 1.7 2.1
-0.7 1.9 2.5
0.0 -3.5 0.5 -1.9 -2.0 -1.5
-1.6 -1.2 -0.8
-1.6 -1.3 -1.1
-1.4 -1.9 -0.9 -3.0 -3.6 -4.3
-2.9 -2.6 -2.3
-3.3 -2.5 -2.1
-3.1 -2.7 1.7 1.3 -1.5 -1.4
0.1 -0.1 -0.7
-1.8 -2.0 -2.0
0.4 2.2 2.7 1.5 -1.7 -4.4
-4.0 -1.1 -0.3
-1.6 0.1 -0.4
0.3 -1.5 1.8 0.9 -2.4 -0.5
2.2 2.2 2.6
0.8 1.6 2.4
-3.0 -1.1 -0.4 -0.7 -2.7 -6.1
-3.7 -2.9 -1.8
-6.4 -1.9 -0.3
-2.5 -2.1 0.7 -0.2 -5.7 -1.1
-0.1 -0.2 0.3
-1.5 -3.0 -0.3
1.2 1.8 2.4 2.8 -1.7 0.9
0.7 -0.8 -0.5
0.4 -0.6 0.6
0.4 1.0 1.6 0.0 -4.0 -6.0
-4.6 -3.4 -2.4
-4.9 -3.9 -2.5
1.6 -1.2 1.3 1.7 -0.6 -1.2
-0.2 -2.0 -1.2
-1.5 -3.7 -2.5
0.2 0.0 0.9 0.8 -3.6 -3.3
-2.9 -1.3 -0.2
-3.0 -1.8 -0.6
-1.5 -2.7 1.1 1.4 0.6 1.4
0.9 1.1 1.9
-0.7 1.1 1.4
-2.0 -3.2 -0.4 -0.7 -3.1 -4.4
-1.0 -4.8 -3.3
-3.2 -4.5 -3.3
-2.1 -3.4 1.9 0.8 -4.6 -4.4
-4.0 -3.7 -2.3
-4.7 -5.4 -2.2
4.1 0.6 0.1 -0.3 -3.2 -1.7
0.0 -1.0 -0.7
-0.6 -0.8 -0.8
0.2 -0.5 1.2 0.3 -2.3 -2.9
-2.1 -1.5 -0.7
-2.1 -1.6 -1.3
2.2 -1.5 0.3 2.3 -1.9 -3.5
-2.8 -4.4 -4.4
-3.3 -2.5 -2.3
-2.4 -1.6 0.9 -0.1 -3.3 -3.8
-2.1 -1.4 -1.1
-2.9 -1.9 -0.9
4.2 1.4 2.5 5.2 3.2 4.9
3.9 3.6 2.6
2.2 1.8 1.7
-3.6 2.3 0.3 -1.6 -3.3 -4.5
-3.6 0.6 0.5
-3.7 -0.6 -1.1
-1.4 -3.3 -0.3 -0.7 -4.2 -0.9
-3.2 -2.5 -0.8
-3.5 -2.0 -1.4
-3.1 -2.8 -0.4 -3.8 -6.2 -5.1
-4.6 -2.5 -2.4
-4.5 -2.7 -2.2
2.8 1.5 0.8 0.8 -0.4 0.5
1.1 0.8 1.3
0.3 1.4 1.5
0.2 -0.5 1.2 0.3 -2.3 -2.5
-1.9 -1.3 -0.7
-2.0 -1.5 -1.1
Poland
Romania
Sweden
EU
¹ Cyclically-adjusted variables for Croatia are based on provisional values for fiscal semi-elasticities and subject to further revisions
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Latvia
Cyclically-adjusted primary balance, general government¹ (as a percentage of potential GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
European Economic Forecast, Spring 2023
178
Table 40:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
: : -2.2 -3.0 -5.8 -4.7
-4.2 -4.9 -4.5
-5.5 -5.2 -4.4
: : 1.1 0.9 -2.7 -2.9
-2.3 -2.0 -1.0
-2.0 -2.4 -2.2
: : -0.2 -0.5 -4.1 -4.3
-0.2 -1.2 -1.3
-1.8 -2.5 -2.3
: : -2.1 2.6 -1.8 -1.7
-0.8 -0.1 1.0
-2.4 -0.8 0.3
: : 5.5 3.1 -3.1 -4.7
-2.2 -1.5 -1.0
-3.4 -1.1 -0.5
: : -2.0 -3.8 -3.7 -3.6
-4.0 -3.7 -3.2
-3.7 -3.6 -3.4
: : -2.8 -3.5 -4.8 -5.6
-4.7 -4.4 -4.2
-5.0 -4.9 -4.9
: : -1.4 -0.9 -3.5 -2.9
-1.0 -1.3 -1.9
-3.1 -3.1 -3.1
: : -1.4 -1.9 -5.2 -8.4
-8.6 -5.3 -4.5
-6.0 -4.1 -4.6
: : 2.5 -0.1 -4.5 -2.4
0.7 0.9 1.3
-0.7 0.2 1.1
: : -1.5 -1.4 -3.4 -6.7
-4.2 -3.5 -2.6
-6.9 -2.5 -0.8
: : -0.7 -1.1 -6.4 -1.6
-0.4 -0.6 -0.3
-1.8 -3.5 -0.9
: : 2.0 2.5 -2.0 0.8
0.5 -1.1 -0.8
0.2 -0.8 0.3
: : -0.5 -1.3 -5.3 -7.1
-5.5 -4.6 -3.9
-6.0 -5.2 -3.8
: : 0.0 0.8 -1.3 -1.6
-0.7 -2.7 -1.9
-2.1 -4.3 -3.1
: : -0.8 -0.7 -4.9 -4.4
-3.8 -2.5 -1.5
-4.1 -2.9 -1.8
: : : -0.9 -1.6 -1.3
-0.8 -0.8 -0.8
-2.6 -1.2 -1.0
: : -2.0 -2.0 -4.3 -5.5
-2.0 -5.8 -4.5
-4.3 -5.5 -4.4
-3.5 -5.3 -0.5 -0.9 -6.1 -5.6
-5.0 -4.9 -3.7
-5.8 -6.4 -3.4
: : : -1.3 -3.9 -2.3
-0.6 -1.8 -1.9
-1.1 -1.5 -1.6
-2.7 -3.3 -0.8 -1.2 -3.7 -4.3
-3.7 -3.2 -2.5
-3.6 -3.4 -3.2
: : 0.2 1.7 -2.4 -4.0
-3.2 -5.0 -5.0
-3.8 -2.9 -2.8
: : 0.0 -0.8 -4.1 -4.5
-3.2 -2.7 -2.4
-3.8 -3.1 -2.1
: : 0.4 4.5 2.6 4.4
3.1 3.5 2.1
1.6 1.7 1.2
: : -2.8 -3.7 -5.8 -6.7
-6.4 -3.2 -3.8
-6.7 -3.7 -4.5
: : -1.9 -2.1 -5.7 -2.2
-5.0 -4.5 -2.9
-5.5 -4.7 -4.2
: : -1.7 -4.6 -7.4 -6.2
-5.8 -4.3 -4.1
-6.3 -4.6 -4.3
: : 0.3 0.4 -0.7 0.3
0.6 0.1 0.7
-0.1 1.0 1.1
: : : -1.1 -3.6 -3.9
-3.5 -3.0 -2.4
-3.6 -3.2 -3.0
Poland
Romania
Sweden
EU
Hungary
Bulgaria
Czechia
Malta
Netherlands
Austria
Portugal
Slovakia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Slovenia
Finland
Euro area
Latvia
Structural budget balance, general government¹ (as a percentage of potential GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 41:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
92.9 102.9 103.8 97.6 112.0 109.1
105.1 106.0 107.3
106.2 107.9 108.6
65.9 78.7 68.4 59.6 68.7 69.3
66.3 65.2 64.1
67.4 66.3 65.4
4.5 8.0 9.6 8.5 18.5 17.6
18.4 19.5 21.3
18.7 19.3 21.9
28.8 99.6 77.2 57.0 58.4 55.4
44.7 40.4 38.3
44.7 41.2 39.3
105.3 157.9 180.7 180.6 206.3 194.6
171.3 160.2 154.4
171.1 161.9 156.9
40.5 74.8 102.7 98.2 120.4 118.3
113.2 110.6 109.1
114.0 112.5 112.1
66.2 88.0 96.9 97.4 114.6 112.9
111.6 109.6 109.5
111.7 110.8 110.2
39.1 63.6 79.3 71.0 87.0 78.4
68.4 63.0 61.8
70.0 67.2 68.0
105.7 122.9 134.8 134.1 154.9 149.9
144.4 140.4 140.3
144.6 143.6 142.6
57.4 72.0 101.8 90.8 113.8 101.2
86.5 80.4 72.5
89.6 84.0 77.7
12.7 42.5 39.0 36.5 42.0 43.7
40.8 39.7 40.5
42.4 44.0 43.6
16.8 35.9 39.1 35.8 46.3 43.7
38.4 37.1 36.6
38.0 41.0 39.9
9.3 19.2 21.1 22.4 24.5 24.5
24.6 25.9 27.0
24.3 26.0 26.3
65.8 67.0 52.9 40.3 52.9 55.1
53.4 54.8 56.1
57.4 59.9 60.6
48.6 62.3 60.8 48.5 54.7 52.5
51.0 49.3 48.8
50.3 52.4 53.2
67.0 81.6 80.9 70.6 82.9 82.3
78.4 75.4 72.7
78.5 76.6 74.9
72.3 112.6 128.7 116.6 134.9 125.4
113.9 106.2 103.1
115.9 109.1 105.3
33.4 45.3 51.7 48.0 58.9 61.0
57.8 58.3 58.7
59.6 57.4 57.4
24.8 48.6 77.2 65.4 79.6 74.5
69.9 69.1 66.6
69.9 69.6 68.8
37.4 49.3 62.5 64.9 74.7 72.6
73.0 73.9 76.2
70.7 72.0 73.3
68.8 88.5 91.8 86.0 99.2 97.3
93.2 90.8 89.9
93.7 92.5 91.6
22.5 15.5 25.8 20.0 24.5 23.9
22.9 25.0 28.1
22.5 23.6 25.6
27.8 39.7 36.9 30.0 37.7 42.0
44.1 42.9 43.1
42.9 44.2 44.5
34.8 43.6 38.2 33.7 42.2 36.7
30.1 30.1 28.8
33.7 32.8 32.1
64.2 78.7 73.7 65.3 79.3 76.6
73.3 70.7 71.1
76.4 75.2 75.1
46.0 54.2 51.3 45.7 57.2 53.6
49.1 50.5 53.0
51.3 52.9 54.2
14.3 31.3 36.9 35.1 46.9 48.6
47.3 45.6 46.1
47.9 47.3 47.6
43.4 38.8 42.2 35.5 39.8 36.5
33.0 31.4 30.7
32.1 29.4 28.5
65.2 82.8 85.3 79.3 91.7 89.5
85.3 83.4 82.6
86.0 84.9 84.1
Poland
Romania
Sweden
EU
Hungary
Bulgaria
Czechia
Malta
Netherlands
Austria
Portugal
Slovakia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Slovenia
Finland
Euro area
Latvia
Gross debt, general government (as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Statistical Annex
179
Table 42:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
28.0 24.6 24.8 25.1 25.4 26.4
24.7 24.1 23.9
25.6 24.4 24.7
26.1 26.4 28.8 29.8 29.2 30.7
28.9 29.6 29.4
28.5 29.2 29.5
24.5 25.8 27.8 28.7 28.5 30.6
29.9 28.8 29.1
28.0 27.1 27.5
23.9 16.5 31.2 35.4 36.5 38.9
37.5 39.0 39.4
41.8 41.8 41.0
12.7 7.3 10.3 10.1 6.9 9.9
9.7 12.1 13.6
12.5 13.6 14.0
21.4 18.7 21.4 22.9 21.0 21.8
21.6 22.9 23.2
21.9 22.2 22.9
23.2 21.4 22.3 23.7 21.2 24.3
23.5 24.2 24.2
23.7 24.0 25.3
20.6 18.1 23.1 25.8 23.7 25.0
25.6 25.7 25.8
23.2 22.5 22.6
20.3 17.6 19.9 21.5 21.6 23.7
20.4 21.4 22.7
22.2 21.5 22.4
6.4 14.0 13.5 14.3 10.1 11.0
11.1 12.0 11.9
10.1 12.4 13.5
21.5 24.1 22.8 22.4 24.6 21.2
19.6 19.3 20.2
19.3 19.4 21.7
16.0 18.1 20.1 21.3 21.2 20.8
21.4 22.5 23.2
21.0 21.4 21.7
29.2 20.4 21.0 16.9 20.3 22.9
23.7 24.1 24.0
21.3 20.6 21.3
18.8 15.3 27.5 28.1 23.6 24.3
27.7 27.8 28.0
26.4 27.1 27.5
25.9 25.8 28.3 29.0 26.9 28.7
25.8 26.9 26.9
27.6 27.1 28.2
27.1 25.6 26.4 27.8 28.7 28.3
27.6 27.5 27.7
27.3 27.0 26.9
13.4 13.0 16.9 18.6 17.9 19.8
19.2 21.2 21.3
19.4 20.0 20.4
22.8 21.8 22.9 20.8 20.0 19.8
15.8 16.6 17.8
15.4 16.5 17.2
27.2 21.1 24.9 26.7 27.8 25.9
24.0 24.4 25.0
24.1 24.8 25.3
28.8 22.4 21.9 23.8 25.1 24.6
22.7 22.4 22.7
24.9 24.8 25.0
23.4 21.8 24.3 25.6 24.8 26.5
25.1 25.7 25.9
25.5 25.7 26.4
14.1 21.2 22.6 22.9 20.4 19.2
20.3 18.4 18.3
21.5 20.1 20.0
26.7 23.0 26.1 26.7 26.8 27.9
27.6 29.2 30.2
26.5 24.8 25.1
26.5 25.2 29.5 30.3 30.5 32.0
37.7 35.2 34.9
31.7 31.7 31.6
17.1 21.4 25.4 27.5 26.3 26.8
25.7 25.5 25.2
24.9 23.8 24.8
16.9 16.7 19.0 20.2 21.1 20.0
20.7 20.0 20.4
21.3 19.5 20.0
17.2 22.7 22.5 19.4 19.3 19.1
18.0 19.0 19.7
19.5 20.7 22.4
30.3 28.1 27.9 30.4 31.1 32.3
32.6 32.7 32.8
30.7 30.3 31.0
23.4 22.0 24.3 25.6 24.9 26.4
25.2 25.8 26.0
25.5 25.5 26.2
14.9 12.7 13.3 15.4 14.1 16.8
15.8 15.3 15.7
14.7 12.9 12.8
29.6 25.5 28.3 29.2 28.2 29.5
27.9 29.2 30.0
26.2 26.4 26.8
17.4 16.5 19.7 19.7 19.3 18.0
18.4 17.2 17.5
17.7 17.6 18.3
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Latvia
Gross national saving (as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 43:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
25.7 25.1 24.0 24.4 31.4 28.9
25.8 26.0 25.4
27.7 27.2 26.7
24.7 24.7 24.7 25.1 29.9 30.5
27.0 27.8 26.3
26.5 27.9 27.9
18.1 21.8 23.0 24.2 28.3 27.8
25.6 27.3 27.4
24.9 25.3 25.3
20.2 22.7 30.2 32.6 39.0 38.4
33.7 35.1 35.0
39.0 38.8 37.5
16.0 13.7 8.9 7.0 11.0 12.7
8.7 10.1 10.9
13.2 12.0 11.6
16.5 23.7 23.6 23.8 28.2 25.3
23.6 24.5 24.4
23.4 23.6 23.7
21.5 21.9 21.2 22.5 25.4 26.4
23.9 24.3 23.8
24.2 24.9 25.9
16.3 18.3 20.9 21.0 25.7 23.2
21.2 21.9 21.9
20.7 20.4 20.2
19.0 17.8 19.1 19.9 26.0 25.1
21.7 22.0 22.3
23.8 21.5 22.9
3.8 15.2 9.8 9.1 12.9 10.8
6.3 7.1 7.2
6.4 8.9 10.0
18.2 24.5 20.0 19.3 23.6 24.1
19.3 19.7 19.1
21.6 19.8 19.8
13.1 20.7 17.3 18.2 23.2 18.9
19.0 20.7 21.0
19.9 22.2 19.9
22.2 15.1 14.6 9.7 17.8 16.8
18.6 20.6 20.3
16.0 16.6 16.4
19.8 16.0 24.0 24.1 29.3 28.3
30.3 29.9 29.6
28.8 29.6 29.1
22.6 25.8 25.3 24.0 27.1 27.5
22.2 25.2 24.7
24.8 26.1 26.1
24.9 24.6 23.5 23.6 32.7 30.1
26.0 25.8 25.0
25.8 25.4 24.8
14.5 17.4 16.9 16.0 19.8 20.0
16.4 18.4 18.7
17.9 18.5 18.5
21.5 24.0 21.3 18.8 21.7 22.2
14.9 19.6 19.4
16.3 19.2 18.4
23.6 21.6 22.8 22.3 31.3 26.1
22.0 22.8 23.1
22.5 24.4 22.9
21.8 20.6 19.7 20.5 26.0 23.1
19.5 20.4 20.9
21.8 22.5 22.7
21.3 22.3 22.4 23.0 27.8 27.5
24.3 25.1 24.5
25.0 25.4 25.7
8.2 20.5 19.6 17.1 20.7 21.2
20.6 20.6 21.2
22.4 20.3 19.9
22.3 21.7 22.3 22.1 27.4 28.4
26.6 28.8 29.3
26.5 24.9 24.6
19.6 23.6 24.8 23.1 26.3 24.9
31.1 29.0 29.6
26.0 26.9 26.6
18.5 21.9 22.3 23.2 24.5 26.4
23.8 23.8 23.6
22.9 22.2 23.4
16.4 17.6 17.4 17.4 23.4 17.6
19.4 20.7 19.8
21.2 20.3 20.4
13.8 23.2 21.1 20.3 24.3 22.5
20.2 19.8 20.1
23.6 22.6 23.8
24.3 24.6 23.1 24.9 28.8 27.6
26.9 28.5 28.3
25.8 25.4 26.2
21.1 22.3 22.3 22.7 27.5 26.9
24.2 25.0 24.5
24.9 25.1 25.4
15.1 16.9 13.5 14.1 21.9 20.7
17.2 14.7 14.2
17.2 13.6 12.8
29.8 29.6 28.3 28.1 32.6 31.1
31.3 31.2 30.1
28.4 26.6 25.8
18.4 22.6 21.8 22.9 30.5 26.6
19.8 18.9 19.7
20.5 21.1 22.2
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Latvia
Gross saving, private sector (as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
European Economic Forecast, Spring 2023
180
Table 44:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
17.0 15.4 12.3 12.3 20.5 17.0
12.9 14.0 13.4
12.7 13.2 12.4
17.1 17.0 17.8 18.3 23.6 22.9
20.0 20.0 19.7
19.6 19.5 19.0
0.0 9.1 10.8 11.8 14.3 10.5
5.3 8.1 7.8
4.2 6.0 6.2
9.4 12.1 8.7 10.7 25.5 24.3
21.5 19.9 18.0
17.7 16.4 13.1
6.3 0.1 -3.8 -2.5 2.4 3.6
-3.0 -1.2 0.0
1.8 1.9 1.4
7.6 9.1 6.4 8.2 17.7 13.8
7.2 7.0 6.6
8.5 8.3 8.1
14.2 15.2 13.9 14.7 20.5 18.3
16.1 16.0 15.1
16.4 15.5 15.0
4.7 5.9 7.7 8.5 11.9 10.7
1.7 0.4 0.0
: : :
14.4 11.1 10.5 10.0 17.4 15.0
10.0 8.7 9.0
10.9 9.5 10.3
6.2 4.3 0.9 5.7 12.5 10.9
4.8 6.7 7.7
7.1 6.5 7.8
3.9 3.5 5.0 9.1 14.6 13.9
5.1 4.5 5.2
5.2 4.8 7.5
2.6 4.5 0.6 3.8 12.4 5.8
3.9 4.0 4.7
4.2 3.6 4.6
11.0 13.0 13.4 14.2 24.2 18.2
18.7 20.2 17.7
14.5 14.6 13.6
-13.1 -10.5 3.1 9.4 18.4 :
:
: : :
: : :
10.3 15.0 16.5 18.3 24.9 23.7
14.9 16.3 16.3
16.4 16.4 16.2
16.3 14.3 12.9 14.0 18.7 17.6
13.2 13.2 14.5
12.2 12.8 14.0
8.8 9.7 6.8 7.2 11.9 9.9
6.1 6.7 6.8
6.0 6.5 6.8
6.6 7.4 8.5 9.6 11.4 10.9
5.2 5.9 6.5
4.3 5.9 5.8
16.2 11.5 12.3 13.4 22.7 18.7
8.6 9.1 11.3
8.3 9.9 11.6
7.3 8.8 7.0 8.5 12.7 10.7
6.6 6.7 6.8
5.7 5.8 5.9
13.8 13.8 13.2 13.9 20.5 18.5
14.5 14.4 14.1
14.7 14.3 14.1
-9.5 0.1 0.0 : : :
:
: : :
: : :
11.8 12.2 12.0 13.1 19.2 19.2
17.0 16.5 15.3
13.6 10.9 9.4
5.0 7.9 9.8 10.2 11.7 9.3
14.0 13.5 14.4
10.6 10.4 10.5
10.7 11.3 12.9 14.7 15.4 17.5
13.0 12.9 13.4
11.9 10.1 10.4
4.9 4.8 5.1 4.6 11.3 2.8
1.4 2.8 2.9
3.9 2.4 3.5
: : : : : :
: : :
: : :
8.7 14.0 15.6 18.0 19.5 18.5
16.1 17.3 17.5
13.3 11.4 12.8
12.1 12.3 11.5 12.3 18.4 16.7
13.2 13.1 12.8
13.4 12.7 12.6
7.5 9.8 6.7 5.3 15.8 12.6
8.5 7.9 9.4
7.2 5.3 6.5
11.3 10.6 8.8 10.8 18.0 15.0
14.7 14.2 13.9
13.7 10.2 9.8
9.8 12.2 12.8 14.4 22.1 17.4
12.3 11.8 12.0
14.2 14.0 13.9
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Latvia
Saving rate of households (2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 45:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
2.3 -0.5 0.9 0.7 -6.0 -2.5
-1.1 -1.9 -1.4
-2.2 -2.8 -2.0
1.4 1.7 4.1 4.8 -0.7 0.2
1.8 1.8 3.0
2.0 1.2 1.6
6.5 4.0 4.7 4.4 0.1 2.8
4.3 1.6 1.7
3.1 1.7 2.2
3.7 -6.2 1.0 2.9 -2.5 0.5
3.7 3.9 4.4
2.8 3.0 3.4
-3.4 -6.4 1.4 3.1 -4.1 -2.8
1.0 1.9 2.7
-0.6 1.6 2.3
4.9 -5.0 -2.2 -0.9 -7.2 -3.5
-2.0 -1.6 -1.1
-1.5 -1.4 -0.8
1.7 -0.5 1.1 1.2 -4.2 -2.2
-0.3 -0.1 0.4
-0.5 -0.9 -0.6
4.2 -0.2 2.1 4.8 -2.0 1.8
4.4 3.8 3.9
2.4 2.2 2.4
1.3 -0.2 0.7 1.7 -4.4 -1.4
-1.3 -0.5 0.4
-1.6 0.0 -0.5
2.6 -1.2 3.7 5.2 -2.8 0.2
4.9 4.9 4.7
3.7 3.5 3.5
3.3 -0.4 2.8 3.1 1.0 -2.9
0.4 -0.4 1.0
-2.2 -0.4 1.8
2.9 -2.6 2.8 3.0 -2.0 1.9
2.5 1.9 2.2
1.1 -0.8 1.7
7.0 5.3 6.4 7.2 2.4 6.1
5.1 3.5 3.7
5.3 4.0 4.9
-1.0 -0.7 3.4 4.0 -5.7 -4.0
-2.6 -2.1 -1.5
-2.5 -2.5 -1.6
3.3 0.0 3.1 5.0 -0.2 1.2
3.6 1.7 2.2
2.8 1.0 2.1
2.2 1.0 2.9 4.2 -4.0 -1.8
1.6 1.7 2.7
1.5 1.6 2.1
-1.1 -4.4 0.0 2.6 -1.8 -0.3
2.8 2.8 2.6
1.4 1.5 1.8
1.3 -2.1 1.5 2.0 -1.7 -2.5
0.9 -3.1 -1.7
-0.9 -2.7 -1.2
3.6 -0.5 2.1 4.4 -3.6 -0.2
2.0 1.7 1.9
1.6 0.5 2.4
7.1 1.8 2.2 3.2 -0.9 1.5
3.2 2.0 1.7
3.1 2.3 2.3
2.0 -0.5 1.8 2.6 -3.0 -1.0
0.7 0.7 1.4
0.5 0.3 0.7
6.0 0.7 3.0 5.8 -0.3 -1.9
-0.2 -2.2 -2.9
-1.0 -0.3 0.1
4.4 1.3 3.9 4.5 -0.6 -0.5
1.0 0.4 0.9
0.0 -0.1 0.4
6.9 1.6 4.7 7.3 4.2 7.1
6.6 6.1 5.3
5.7 4.8 5.0
-1.5 -0.5 3.1 4.3 1.8 0.4
1.9 1.7 1.6
2.0 1.6 1.4
0.5 -0.9 1.7 2.9 -2.4 2.4
1.2 -0.7 0.6
0.1 -0.7 -0.4
3.3 -0.5 1.3 -0.9 -5.0 -3.5
-2.2 -0.8 -0.3
-4.1 -1.8 -1.4
5.9 3.5 4.8 5.4 2.3 4.7
5.7 4.2 4.5
4.9 5.0 4.8
2.3 -0.3 2.0 2.9 -2.6 -0.5
1.0 0.8 1.5
0.7 0.5 0.8
-0.2 -4.2 -0.2 1.3 -7.8 -3.9
-1.4 0.7 1.5
-2.5 -0.7 0.0
-0.2 -4.1 -0.1 1.1 -4.4 -1.6
-3.3 -2.0 -0.1
-2.2 -0.2 1.1
-1.0 -6.1 -2.2 -3.3 -11.3 -8.6
-1.4 -1.7 -2.2
-2.8 -3.5 -3.9
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Latvia
Gross saving, general government (as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Statistical Annex
181
Table 46:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
4.9 0.5 4.3 2.4 -5.0 11.3
5.1 1.3 2.5
4.0 1.3 3.2
8.2 2.0 4.0 1.3 -9.3 9.7
2.9 1.5 3.1
1.4 0.9 3.0
11.9 5.8 2.7 6.1 -5.3 19.9
5.0 0.9 2.8
5.1 1.6 3.6
4.5 3.2 15.0 11.8 11.2 14.1
15.0 6.7 5.5
10.9 4.6 4.1
8.1 -2.3 6.0 4.9 -21.5 24.1
4.9 6.5 5.2
12.7 3.9 4.4
3.5 2.1 4.3 2.2 -19.9 14.4
14.4 4.1 3.3
17.2 2.7 5.0
3.7 1.6 3.7 1.6 -16.8 8.8
7.0 4.4 3.8
7.7 3.0 4.8
4.5 -0.8 7.0 6.8 -23.3 36.4
25.4 3.0 3.7
25.9 1.8 3.1
4.1 -0.2 3.3 1.6 -13.5 14.0
9.4 2.3 3.1
10.9 2.2 3.9
2.7 1.8 8.1 8.7 2.2 13.6
13.7 2.8 3.7
8.0 1.4 2.1
12.0 4.2 4.8 2.1 -0.3 5.9
9.1 2.4 2.5
7.7 0.5 2.8
10.8 6.5 5.0 10.1 0.4 17.0
11.9 1.9 4.8
7.3 0.9 5.6
6.5 2.9 4.0 4.5 0.2 9.7
-0.6 2.6 3.6
2.7 1.3 3.7
9.9 3.8 9.0 10.1 -1.6 6.3
6.4 3.6 3.0
7.2 3.1 3.8
5.6 2.2 4.9 2.0 -4.3 5.2
4.7 3.8 1.8
4.6 1.4 1.7
6.5 0.9 3.8 4.0 -10.7 9.6
11.1 1.5 2.5
10.5 1.4 1.0
4.4 3.0 5.5 4.1 -18.6 13.4
16.7 5.4 3.2
16.6 2.3 2.4
14.6 4.7 4.8 0.8 -6.3 10.9
2.3 3.2 6.1
-1.7 1.8 3.1
11.3 0.3 6.8 4.5 -8.6 14.5
6.5 2.8 4.0
7.1 3.3 3.6
8.2 -2.7 2.5 6.7 -7.8 6.0
1.7 1.6 3.6
1.4 2.2 3.9
5.9 1.6 4.7 2.9 -9.0 10.7
7.0 3.1 3.3
6.5 2.0 3.4
12.4 4.3 5.1 4.0 -10.4 11.0
8.3 2.6 3.2
7.1 1.5 3.3
15.2 3.4 6.0 1.5 -8.0 6.9
5.7 5.1 4.4
4.6 2.7 3.9
5.7 0.6 3.8 4.5 -6.3 8.0
8.6 1.1 1.4
5.4 3.7 4.8
14.5 1.6 6.3 5.4 -6.1 8.8
11.8 3.5 4.5
6.5 3.5 4.8
9.4 4.5 7.4 5.3 -1.1 12.3
6.2 2.3 3.6
4.2 2.8 4.6
13.9 8.3 8.4 5.4 -9.5 12.6
9.6 4.0 4.8
8.2 3.5 4.8
6.5 0.2 4.2 6.0 -5.5 10.0
6.6 2.0 2.6
4.3 0.1 2.9
6.3 1.7 4.9 3.1 -8.4 10.5
7.1 3.0 3.3
6.3 2.1 3.6
4.9 1.0 3.6 1.7 -12.1 2.2
9.9 -4.2 0.2
7.3 1.7 1.9
8.3 -0.7 4.9 -1.5 -11.6 11.7
4.9 4.3 2.8
3.7 3.3 3.0
8.1 3.5 2.3 0.5 -13.2 6.1
7.1 3.6 2.6
7.2 2.9 4.8
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Latvia
Exports of goods and services, volume (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 47:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024
2022 2023 2024
5.4 0.5 4.8 2.0 -5.6 10.7
4.9 1.6 2.7
3.5 1.6 3.5
6.7 2.4 4.7 2.9 -8.5 9.0
6.0 0.4 3.4
5.0 0.8 3.4
11.6 3.8 3.5 3.8 0.4 21.0
5.8 1.8 3.2
3.3 1.4 3.4
5.9 0.3 13.4 42.3 -2.1 -8.3
19.0 5.5 4.5
9.4 4.3 4.1
6.9 -8.7 6.4 2.9 -7.3 17.7
10.2 4.7 3.8
9.9 3.1 3.3
5.4 -4.1 5.0 1.3 -14.9 13.9
7.9 2.8 4.2
8.8 2.8 4.5
5.0 1.4 4.3 2.3 -12.8 8.0
8.9 3.6 3.5
8.1 2.5 4.8
5.7 -4.4 7.0 6.6 -12.4 17.6
25.0 2.9 3.4
23.7 2.2 3.2
3.4 -2.6 4.7 -0.7 -12.1 15.2
11.8 0.8 2.3
13.5 2.2 3.4
7.3 -3.4 8.9 9.5 3.2 9.0
18.8 2.1 2.9
5.9 0.9 1.6
12.4 0.1 4.6 3.1 -0.3 15.3
11.7 1.5 1.8
10.2 0.2 2.2
14.7 1.2 5.7 6.0 -4.5 19.9
12.3 2.0 4.9
6.6 0.0 5.4
6.2 3.7 4.4 5.7 -0.4 11.8
-0.9 2.7 3.8
3.1 1.8 4.0
9.6 2.6 8.3 11.2 2.0 3.8
9.7 2.2 2.7
6.2 2.8 3.6
5.3 1.7 5.2 3.2 -4.8 4.0
4.1 4.1 2.0
3.7 1.9 1.6
5.1 1.2 4.2 2.1 -9.2 13.7
5.7 2.0 2.3
6.7 1.2 1.1
5.0 -2.1 6.8 4.9 -11.8 13.2
11.1 3.3 3.6
10.9 3.4 3.0
13.9 1.9 5.3 2.2 -8.1 12.1
4.0 3.9 5.2
-0.9 1.7 3.0
10.9 -2.0 6.5 4.7 -9.6 17.6
9.8 2.8 4.2
8.7 2.4 3.5
8.2 -1.0 3.3 2.4 -6.2 6.0
7.5 -1.3 2.2
2.1 2.4 3.2
5.7 0.3 5.2 4.8 -8.5 8.4
8.0 2.3 3.2
6.7 1.9 3.5
16.6 -1.2 5.6 5.2 -4.3 10.9
10.5 2.9 2.8
11.8 2.6 3.4
12.9 2.3 6.3 1.5 -8.2 13.3
5.7 4.5 4.2
4.8 2.6 3.7
8.6 -0.2 4.3 3.0 -3.6 8.0
4.2 -1.0 0.6
2.9 2.3 4.8
12.1 -0.2 7.1 8.2 -3.9 7.7
11.1 2.0 3.5
7.4 2.0 3.9
11.5 1.2 8.0 3.2 -2.4 16.1
6.2 0.0 3.1
6.4 1.5 4.2
24.4 0.9 10.8 8.6 -5.2 14.9
9.9 5.1 5.5
9.0 3.4 5.0
6.6 0.6 5.1 2.1 -6.0 11.5
8.7 -1.1 1.4
7.8 -0.9 1.3
6.4 0.4 5.4 4.6 -7.9 9.1
7.9 2.1 3.2
6.7 1.9 3.5
4.0 1.7 4.1 2.6 -16.0 6.2
13.3 -7.9 -0.9
12.9 -1.2 1.3
4.4 1.6 2.9 1.0 -6.8 5.0
7.9 3.9 2.1
5.0 2.2 1.4
4.8 1.5 4.1 1.1 -9.0 14.1
8.1 -1.6 0.9
8.5 -1.1 1.9
United States
Poland
Romania
Sweden
EU
United Kingdom
Japan
Hungary
Malta
Netherlands
Austria
Portugal
Slovakia
Slovenia
Finland
Euro area
Bulgaria
Czechia
Denmark
Luxembourg
Belgium
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Latvia
Imports of goods and services, volume (percentage change on preceding year, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
European Economic Forecast, Spring 2023
182
Table 48:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024 2022 2023 2024
Belgium
1.9 -0.8 0.1 0.8 1.3 0.8
-2.2 -0.9 -1.0
-2.2 -2.4 -2.0
Germany
7.1 6.6 7.6 6.2 5.6 5.3
3.0 4.7 4.6
2.5 3.2 3.7
Estonia
-15.5 -4.4 -4.3 -3.3 -0.9 -4.1
-7.4 -6.8 -6.6
-7.0 -7.2 -7.0
Ireland
17.5 22.4 34.7 33.1 38.1 39.2
40.7 41.6 41.0
42.0 42.3 42.1
Greece
-16.8 -12.3 -11.2 -12.9 -11.9 -14.8
-18.8 -18.5 -18.1
-19.4 -20.6 -20.5
Spain
-7.9 -3.3 -1.9 -2.1 -0.8 -1.6
-4.4 -4.1 -4.1
-5.9 -5.9 -5.6
France
-1.2 -2.2 -1.5 -1.4 -2.1 -3.0
-5.1 -3.3 -3.0
-5.5 -4.8 -4.5
Croatia
-21.2 -14.5 -16.4 -18.8 -17.5 -18.3
-25.1 -23.5 -23.1
-26.3 -25.7 -25.8
Italy
0.0 0.3 3.1 3.4 4.1 2.8
-1.1 0.7 1.6
-0.4 -1.0 0.0
Cyprus
-26.1 -20.8 -20.8 -20.0 -19.2 -18.0
-21.8 -21.0 -20.8
-23.8 -24.4 -24.5
Latvia
-21.4 -11.2 -9.4 -8.6 -5.1 -8.3
-11.5 -9.7 -9.4
-13.5 -14.5 -11.9
Lithuania
-13.1 -4.4 -4.9 -4.8 -0.8 -5.2
-11.0 -7.9 -7.6
-8.1 -7.1 -7.2
Luxembourg
-5.8 2.5 3.5 3.3 3.0 2.3
0.8 1.4 1.4
1.0 0.8 0.9
Malta
-19.6 -18.3 -16.0 -10.4 -9.5 -13.0
-20.6 -19.5 -18.3
-17.7 -18.0 -17.7
Netherlands
8.4 8.6 9.5 7.4 7.7 7.3
6.2 7.5 7.4
5.1 4.7 6.1
Austria
0.4 -0.5 0.5 1.1 0.9 -0.1
-0.1 0.9 1.3
0.1 -0.1 -0.2
Portugal
-11.8 -8.2 -6.3 -7.8 -6.5 -7.7
-11.4 -9.9 -10.1
-11.2 -10.5 -10.4
Slovakia
-3.1 2.1 2.3 -0.6 0.9 -0.4
-5.8 -5.1 -3.8
-4.0 -3.5 -3.3
Slovenia
-4.1 -0.8 3.4 2.7 5.0 1.7
-4.3 -3.2 -2.5
-4.4 -4.2 -3.1
Finland
7.7 2.6 0.5 1.0 1.2 0.9
-0.5 0.7 1.2
0.1 0.0 0.0
Euro area
1.0 1.4 3.3 2.9 3.2 2.6
0.2 1.7 2.0
0.0 0.3 0.8
Euro area, adjusted
2)
: 1.9 2.8 2.5 2.9 2.3
-0.6 1.7 2.0
0.2 0.4 0.9
Bulgaria
-23.2 -9.1 -4.2 -4.7 -3.1 -4.1
-5.4 -4.2 -4.0
-5.3 -7.7 -7.8
Czechia
-0.1 2.4 4.7 4.1 4.9 1.2
-1.5 1.0 2.3
-2.9 -4.1 -3.7
Denmark
2.3 4.5 4.6 5.0 5.3 4.0
3.3 7.1 7.4
1.5 2.6 3.5
Hungary
-2.6 2.3 1.5 -2.5 -1.0 -2.9
-8.8 -3.8 -3.2
-8.5 -7.3 -5.2
Poland
-4.4 -2.7 -1.2 -0.8 1.3 -1.3
-3.7 -0.9 -0.5
-4.7 -5.1 -4.6
Romania
-15.5 -6.6 -5.9 -8.0 -8.6 -9.6
-11.3 -10.0 -10.1
-11.2 -11.3 -11.2
Sweden
6.4 4.3 2.6 3.9 4.0 3.9
3.4 4.8 5.4
3.2 2.9 3.7
EU
0.8 1.3 3.0 2.6 3.0 2.2
-0.1 1.5 1.7
-0.4 -0.2 0.3
EU, adjusted
2)
0.0 0.7 2.3 2.0 2.4 1.6
-1.1 1.5 1.7
-0.4 -0.2 0.3
United Kingdom
-5.6 -6.4 -6.8 -6.6 -6.3 -7.5
-9.3 -8.2 -8.1
-10.3 -10.7 -10.7
Japan
2.1 0.1 0.0 0.0 0.5 0.3
-2.8 -2.1 -1.3
-2.1 -2.0 -1.6
United States
-5.9 -4.4 -4.3 -4.1 -4.2 -4.7
-4.8 -4.2 -4.0
-4.8 -4.4 -4.2
² See note 8 on concepts and sources.
¹ See note 7 on concepts and sources.
Merchandise trade balance¹ (fob-fob, as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 49:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024 2022 2023 2024
Belgium
3.8 1.4 0.6 0.1 1.1 0.4
-2.9 -1.8 -1.8
-2.7 -2.9 -2.6
Germany
5.5 6.4 8.2 7.7 7.1 7.4
4.0 5.8 5.6
3.7 4.7 5.0
Estonia
-11.8 0.8 1.4 2.4 -1.0 -1.8
-1.3 -0.3 0.1
0.4 0.7 1.1
Ireland
-4.4 -1.7 1.4 -19.8 -6.8 14.2
8.8 11.1 11.9
18.1 18.2 17.8
Greece
-12.4 -7.6 -2.1 -2.3 -8.0 -8.2
-11.8 -9.2 -7.8
-8.6 -8.6 -8.1
Spain
-8.0 -1.7 2.3 2.1 0.6 1.0
0.6 1.6 1.5
0.9 0.8 1.2
France
0.0 -0.9 -0.7 -0.7 -2.5 -0.8
-3.1 -1.5 -1.3
-2.5 -1.3 -0.8
Croatia
-7.8 -2.5 2.1 2.9 -0.4 3.2
-0.2 0.7 1.1
0.2 -0.6 -0.8
Italy
-1.4 -1.4 2.2 3.3 3.9 3.1
-1.3 0.0 1.3
0.8 -0.2 0.5
Cyprus
-18.1 -5.0 -3.4 -5.5 -10.0 -6.8
-9.1 -7.3 -6.9
-9.6 -7.3 -6.2
Latvia
-15.4 0.0 0.1 -0.6 2.6 -4.2
-6.1 -3.4 -2.7
-6.4 -6.8 -4.0
Lithuania
-10.9 -0.3 0.2 3.5 7.3 1.1
-5.3 -1.1 -0.1
-3.9 -2.8 -2.6
Luxembourg
8.8 2.3 2.6 -1.4 3.1 5.3
5.7 7.2 7.4
3.5 3.0 3.9
Malta
-5.4 -3.3 6.7 8.1 2.4 5.0
1.6 3.8 4.1
5.1 5.5 6.0
Netherlands
4.4 6.2 7.9 6.9 5.1 7.3
4.4 6.0 6.1
5.7 5.3 6.9
Austria
2.9 2.3 1.9 2.5 3.0 0.4
0.2 0.8 1.2
0.2 0.0 -0.1
Portugal
-10.0 -5.2 0.3 0.1 -1.2 -0.8
-1.5 1.0 0.8
-1.5 -0.9 -0.8
Slovakia
-5.5 -0.7 -0.4 -2.9 0.1 -2.4
-7.8 -6.7 -5.3
-6.5 -5.6 -5.3
Slovenia
-3.5 -0.1 5.3 6.1 7.7 4.0
-0.5 0.9 1.7
-0.6 -0.5 -0.3
Finland
4.0 -0.4 -1.4 -0.3 0.6 0.5
-3.9 -1.9 -1.2
-0.2 -0.3 0.1
Euro area
0.2 1.3 3.4 2.7 2.4 3.5
0.6 2.1 2.4
1.5 1.9 2.4
Euro area, adjusted
2)3)
: 2.1 2.8 2.3 1.6 2.3
-1.0 2.1 2.4
1.5 1.9 2.4
Bulgaria
-16.1 -1.3 2.6 1.9 0.0 -1.9
-0.4 0.1 0.2
-1.2 -3.0 -3.2
Czechia
-4.1 -3.6 -0.6 -0.9 0.7 -2.3
-5.4 -2.5 -0.7
-5.8 -6.9 -5.9
Denmark
3.0 6.1 8.0 8.5 7.9 9.0
13.1 10.7 10.7
6.7 7.4 7.8
Hungary
-8.8 0.4 1.6 -0.9 -0.9 -3.8
-8.3 -3.5 -2.8
-7.6 -6.3 -4.3
Poland
-5.4 -4.1 -1.7 -0.3 2.3 -1.4
-3.2 -1.0 0.5
-2.9 -2.5 -1.6
Romania
-10.6 -4.0 -1.8 -4.9 -5.2 -6.5
-8.8 -7.6 -7.4
-9.1 -8.8 -8.4
Sweden
6.9 5.5 3.0 5.2 6.0 6.5
4.4 5.9 6.3
3.3 3.3 4.2
EU
0.0 1.2 3.2 2.6 2.5 3.1
0.5 2.0 2.3
1.1 1.4 1.9
EU, adjusted
2)
-0.3 1.1 2.8 2.4 2.1 2.6
-0.6 2.0 2.3
1.1 1.4 1.9
United Kingdom
-3.1 -3.2 -4.7 -2.8 -3.2 -1.5
-3.8 -2.2 -1.7
-5.6 -6.0 -5.8
Japan
3.7 2.1 3.1 3.5 2.9 3.9
2.1 2.6 3.4
0.7 1.2 1.7
United States
-5.4 -2.6 -2.1 -2.1 -2.8 -3.7
-3.9 -3.3 -3.0
-3.8 -3.2 -2.8
1) See note 7 on concepts and sources. 2) See note 8 on concepts and sources. 3) Euro area adjusted is the euro area 19 (without Croatia) in the Autumn 2022 Forecast and the euro area 20 in the Spring 2023 Forecast.
Current-account balance¹ (as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Statistical Annex
183
Table 50:
28.04.2023
5-year
2004 - 08 2009 - 13 2014 - 18 2019 2020 2021 2022 2023 2024 2022 2023 2024
Belgium
3.7 1.5 0.7 0.2 1.1 0.6
-2.8 -1.6 -1.6
-2.5 -2.8 -2.5
Germany
5.5 6.3 8.0 7.5 6.7 7.2
3.4 5.2 5.1
3.5 4.4 4.8
Estonia
-10.6 4.2 2.7 4.1 0.8 7.1
-0.2 0.6 1.0
1.5 1.7 2.0
Ireland
-4.2 -1.8 -4.6 -29.7 -10.0 15.1
7.2 9.4 10.0
17.3 17.4 17.0
Greece
-10.6 -5.7 -0.5 -1.0 -6.0 -5.5
-9.1 -6.4 -4.9
-5.9 -5.8 -5.2
Spain
-7.5 -1.2 2.7 2.4 1.1 1.9
1.5 2.6 2.4
1.9 1.9 2.4
France
0.0 -0.9 -0.8 -0.7 -2.5 -0.4
-2.8 -1.5 -1.1
-2.3 -1.4 -0.8
Croatia
-7.7 -2.2 3.1 4.5 1.8 5.7
2.1 3.1 3.7
2.6 2.1 2.2
Italy
-1.3 -1.4 2.3 3.2 3.9 3.1
-0.8 0.0 1.3
0.7 -0.3 0.4
Cyprus
-17.6 -4.6 -3.0 -5.6 -10.1 -6.4
-8.3 -6.5 -6.1
-8.9 -6.5 -5.5
Latvia
-14.1 2.4 2.1 0.9 4.3 -2.9
-4.6 -1.3 -0.5
-4.6 -4.1 -1.2
Lithuania
-9.5 3.2 2.1 5.2 9.0 2.6
-3.9 0.2 1.3
-2.4 -1.3 -1.2
Luxembourg
7.8 1.0 1.6 -2.4 2.2 4.5
4.9 6.5 6.7
2.7 2.3 3.1
Malta
-3.6 -1.8 8.0 9.4 4.4 6.5
2.6 4.8 5.1
6.1 6.5 7.0
Netherlands
4.4 5.7 7.7 6.9 5.1 7.3
4.5 6.0 6.2
5.8 5.4 7.0
Austria
2.8 2.3 1.7 2.5 2.9 0.4
0.2 0.8 1.2
0.3 0.0 -0.1
Portugal
-8.7 -3.7 1.4 1.0 -0.2 0.9
-0.6 2.0 1.8
0.5 1.3 1.3
Slovakia
-5.2 0.7 0.2 -2.4 0.7 -2.4
-7.9 -6.7 -5.3
-6.2 -4.7 -3.3
Slovenia
-3.5 0.5 5.1 5.6 7.2 4.1
-0.4 1.0 1.8
-0.4 -0.4 -0.2
Finland
4.1 -0.3 -1.3 -0.2 0.6 0.6
-3.8 -1.9 -1.2
-0.1 -0.2 0.2
Euro area
0.3 1.4 3.3 2.5 2.3 3.7
0.7 2.1 2.4
1.7 2.0 2.5
Euro area, adjusted
2)3)
: 2.2 2.7 2.0 1.5 2.6
-0.9 2.1 2.4
1.7 2.0 2.5
Bulgaria
-15.9 0.1 4.6 3.3 1.5 -1.2
0.5 2.4 2.5
1.3 -0.7 -0.9
Czechia
-3.7 -1.8 0.7 -0.4 1.8 -0.9
-4.0 -1.3 0.4
-3.8 -4.6 -4.2
Denmark
3.0 6.2 7.9 8.5 7.8 9.1
13.3 10.9 10.9
6.8 7.5 8.0
Hungary
-8.2 2.9 3.9 1.0 0.8 -1.3
-6.2 -0.8 -0.2
-4.6 -3.3 -2.0
Poland
-4.8 -2.4 -0.2 1.1 3.6 -1.2
-2.8 -0.5 1.1
-1.5 -1.0 0.1
Romania
-9.9 -2.9 0.4 -3.5 -3.1 -4.4
-6.1 -4.7 -4.5
-7.2 -6.9 -6.5
Sweden
6.7 5.4 2.9 5.2 6.0 6.5
4.5 6.0 6.4
3.4 3.4 4.3
EU
0.2 1.4 3.2 2.5 2.5 3.5
0.7 2.1 2.5
1.4 1.7 2.2
EU, adjusted
2)
-0.1 1.3 2.9 2.3 2.2 2.9
-0.4 2.1 2.5
1.4 1.7 2.2
United Kingdom
-3.1 -3.2 -4.8 -2.9 -3.3 -1.6
-3.9 -2.3 -1.9
-5.7 -6.1 -5.9
Japan
3.6 2.0 3.0 3.4 2.9 3.9
2.0 2.5 3.3
0.7 1.1 1.7
United States
-5.4 -2.7 -2.2 -2.1 -2.8 -3.7
-3.9 -3.3 -3.1
-3.8 -3.2 -2.9
1) See note 7 on concepts and sources; 2) See note 8 on concepts and sources. 3) Euro area adjusted is the euro area 19 (without Croatia) in the Autumn 2022 Forecast and the euro area 20 in the Spring 2023 Forecast.
Net lending (+) or net borrowing (-) of the nation¹ (as a percentage of GDP, 2004-2024)
Spring 2023
Autumn 2022
averages
forecast
forecast
Table 51:
28.04.2023
2016 2017 2018 2019 2020 2021 2022 2023 2024 2022 2023 2024
Belgium
2.4 3.1 -4.2 0.5 5.1 2.2
-16.2 -10.5 -10.6
-14.7 -16.8 -16.0
Germany
272.1 262.7 272.3 267.6 241.9 266.6
156.0 236.9 239.8
144.1 191.0 214.3
Estonia
0.3 0.5 0.2 0.7 -0.3 -0.6
-0.5 -0.1 0.1
0.1 0.3 0.5
Ireland
-11.2 1.6 16.2 -70.6 -25.5 60.7
44.3 61.7 71.0
91.4 99.9 105.1
Greece
-3.9 -3.7 -6.3 -4.2 -13.3 -14.9
-24.5 -20.5 -18.3
-18.0 -19.2 -19.0
Spain
35.4 32.2 22.6 26.2 6.8 11.5
7.8 23.2 22.4
11.2 11.5 17.9
France
-13.5 -16.3 -16.1 -17.1 -58.6 -19.4
-81.2 -40.7 -39.2
-67.1 -37.3 -22.9
Croatia
1.1 1.7 0.9 1.6 -0.2 1.9
-0.1 0.5 0.9
0.1 -0.4 -0.6
Italy
44.0 44.3 46.1 59.4 64.0 55.0
-25.0 0.9 26.8
15.0 -3.5 9.3
Cyprus
-0.7 -1.0 -0.8 -1.3 -2.2 -1.6
-2.5 -2.1 -2.1
-2.6 -2.0 -1.8
Latvia
0.4 0.3 0.0 -0.2 0.8 -1.4
-2.4 -1.5 -1.2
-2.4 -2.7 -1.7
Lithuania
-0.4 0.2 0.1 1.7 3.6 0.6
-3.6 -0.8 -0.1
-2.6 -2.0 -2.0
Luxembourg
1.0 1.7 2.3 -0.9 2.0 3.8
4.4 6.1 6.6
2.7 2.5 3.3
Malta
0.4 1.3 1.4 1.1 0.3 0.8
0.3 0.7 0.8
0.8 1.0 1.1
Netherlands
50.4 65.8 72.1 56.3 41.0 62.2
41.5 60.8 64.7
53.1 52.1 71.8
Austria
10.2 5.5 4.0 9.9 11.3 1.7
1.0 3.6 6.2
1.0 -0.2 -0.7
Portugal
1.2 2.0 0.5 0.3 -2.4 -1.8
-3.5 2.6 2.2
-3.5 -2.3 -2.1
Slovakia
-1.7 -0.8 -0.6 -2.7 0.1 -2.4
-8.6 -8.2 -7.0
-7.0 -6.9 -6.9
Slovenia
2.0 2.7 2.8 3.0 3.6 2.1
-0.3 0.6 1.1
-0.3 -0.3 -0.2
Finland
-4.3 -1.8 -4.3 -0.8 1.3 1.2
-10.3 -5.3 -3.6
-0.5 -0.8 0.3
Euro area
385.0 402.2 409.1 330.4 279.5 428.2
76.7 307.7 360.3
200.8 263.7 349.7
Euro area, adjusted
2)3)
325.4 349.7 323.4 269.8 183.2 284.6
-136.5 307.7 360.3
200.7 264.2 350.3
Bulgaria
2.6 3.2 0.5 1.1 0.0 -1.3
-0.3 0.1 0.2
-1.0 -2.6 -2.9
Czechia
-0.4 1.6 -1.3 -2.1 1.4 -5.5
-14.9 -8.1 -2.4
-16.0 -20.9 -19.0
Denmark
22.0 23.6 22.0 26.2 24.6 30.4
49.4 40.5 42.0
23.9 27.6 30.5
Hungary
4.9 2.0 0.0 -1.3 -1.3 -5.9
-14.1 -7.1 -6.0
-12.2 -10.6 -7.8
Poland
-4.8 -5.4 -9.9 -1.4 12.1 -8.3
-21.0 -7.4 3.9
-19.2 -17.9 -12.6
Romania
-2.0 -5.9 -9.1 -11.0 -11.4 -15.7
-25.1 -24.8 -26.5
-25.7 -28.1 -29.5
Sweden
11.3 13.6 12.4 25.0 28.8 35.0
24.7 32.6 35.9
18.6 18.7 24.3
EU
418.5 434.8 423.8 366.9 333.7 457.0
75.3 333.6 407.3
169.2 230.0 332.6
EU, adjusted
2)
402.5 393.7 364.7 338.1 283.4 375.1
-97.3 333.6 407.3
169.2 230.0 332.6
United Kingdom
-133.9 -85.8 -99.3 -72.1 -75.9 -39.7
-110.1 -64.9 -52.7
-164.8 -182.8 -181.6
Japan
178.0 179.8 149.6 157.8 129.4 166.3
83.7 102.2 138.7
28.5 46.4 69.7
United States
-364.7 -328.8 -373.6 -404.3 -518.7 -728.5
-944.6 -801.6 -761.3
-933.4 -862.7 -788.8
1) See note 7 on concepts and sources; 2) See note 8 on concepts and sources. 3) Euro area adjusted is the euro area 19 (without Croatia) in the Autumn 2022 Forecast and the euro 20 in the Spring 2023 Forecast.
Current-account balance¹ (in billions of euro, 2016-2024)
Spring 2023
Autumn 2022
forecast
forecast
European Economic Forecast, Spring 2023
184
Table 52:
28.04.2023
2016 2017 2018 2019 2020 2021 2022 2023 2024 2022 2023 2024
Belgium
2.5 5.3 4.0 2.7 -8.9 9.1
7.2 1.6 2.8
6.6 1.8 3.4
Germany
3.1 5.8 4.3 1.8 -7.8 10.7
6.3 1.6 2.8
6.0 2.0 3.5
Estonia
3.3 6.2 4.5 2.6 -6.8 10.6
7.0 0.7 2.6
5.0 1.4 3.3
Ireland
2.5 5.3 4.1 1.4 -8.8 10.4
7.0 0.4 2.3
6.6 1.4 3.1
Greece
3.2 6.3 3.9 2.1 -8.5 10.5
8.1 1.6 3.0
7.0 2.3 3.7
Spain
2.9 5.3 3.7 2.2 -9.7 10.0
7.8 1.3 2.8
7.3 2.0 3.5
France
3.1 5.4 3.9 2.3 -8.5 10.2
6.8 1.2 2.8
6.3 2.0 3.5
Croatia
4.4 6.7 4.9 3.0 -8.8 12.2
9.1 1.8 3.3
7.1 2.1 3.6
Italy
3.0 5.6 4.0 2.1 -8.7 10.3
6.8 1.6 3.0
6.2 1.9 3.6
Cyprus
0.9 7.6 4.0 2.0 -9.7 11.8
3.0 1.4 2.8
0.9 1.5 3.7
Latvia
3.1 7.0 4.5 3.5 -7.2 12.5
6.1 1.1 3.0
3.9 1.4 4.0
Lithuania
2.9 6.6 4.4 3.0 -7.3 11.1
5.2 1.3 2.9
3.4 2.1 4.4
Luxembourg
3.6 5.0 3.6 2.4 -9.4 9.5
7.8 0.8 2.6
7.2 1.7 3.4
Malta
2.8 5.6 4.2 2.3 -8.6 9.6
7.5 1.1 2.8
6.9 2.5 3.6
Netherlands
4.6 5.1 3.8 5.0 -8.2 9.1
7.9 1.3 3.0
6.5 1.8 3.5
Austria
3.9 5.8 4.3 2.4 -8.0 10.4
6.8 1.4 3.2
5.9 1.7 3.6
Portugal
2.3 5.3 3.9 2.3 -10.6 10.1
7.7 1.4 3.0
7.3 2.0 3.7
Slovakia
4.0 6.5 4.9 2.6 -7.8 11.1
6.5 1.7 3.2
5.9 1.8 3.6
Slovenia
4.4 6.1 4.7 2.8 -8.4 11.7
8.8 1.9 3.2
7.7 2.0 3.6
Finland
2.7 6.0 4.1 2.1 -7.6 10.8
5.7 1.2 2.7
4.8 1.7 3.4
Euro area b) c)
3.2 5.6 4.1 2.5 -8.4 10.1
7.0 1.4 2.9
6.3 1.9 3.5
Bulgaria
4.6 7.0 4.5 2.6 -7.6 11.3
7.2 2.3 3.5
6.3 2.3 4.1
Czechia
4.1 6.0 4.4 2.8 -8.1 10.4
6.3 1.4 3.2
5.2 1.6 3.5
Denmark
2.8 5.4 4.1 2.0 -8.3 10.0
7.0 0.8 2.7
6.3 1.7 3.2
Hungary
4.5 6.3 4.6 2.7 -8.1 11.3
6.6 1.7 3.3
6.0 1.8 3.6
Poland
3.7 5.9 4.2 2.8 -8.5 10.2
6.3 1.4 3.1
5.4 1.7 3.7
Romania
3.4 6.1 4.1 2.3 -8.4 10.4
7.5 1.6 3.1
6.7 1.9 3.7
Sweden
3.0 5.1 4.1 2.4 -8.1 9.0
6.8 0.6 2.6
5.7 1.9 3.5
EU (b)
3.3 5.6 4.1 2.5 -8.4 10.1
6.9 1.4 2.9
6.2 1.9 3.5
3.0 5.0 3.9 3.6 -7.7 9.1
7.0 2.0 2.9
6.3 2.1 3.4
Japan
2.2 6.6 5.0 -0.8 -6.7 12.2
3.7 1.7 3.2
4.1 2.8 3.8
1.5 5.4 4.3 1.2 -8.8 10.5
6.6 1.9 3.2
5.9 3.0 3.6
(c) In this table, the euro area in the Autumn 2022 Forecast cosisted of 19 countries, while in the Spring 2023 Forecast it contains 20 countries, i.e. with Croatia
(a) Imports of goods and services to the various markets (incl. EU-markets) weighted according to their share in country's exports of goods and services.
(b) Intra- and extra-EU trade.
United Kingdom
United States
Export markets (a) (percentage change on preceding year, 2016-2024)
Spring 2023
Autumn 2022
forecast
forecast
Table 53:
28.04.2023
2016 2017 2018 2019 2020 2021 2022 2023 2024 2022 2023 2024
Belgium
3.6 0.1 -2.8 -0.3 4.2 2.1
-2.0 -0.3 -0.3
-2.5 -0.5 -0.1
Germany
-0.6 -0.9 -2.0 -0.6 -1.6 -0.8
-3.4 -0.1 0.3
-4.5 -1.1 -0.5
Estonia
1.5 -1.3 -1.6 3.4 1.7 8.5
-1.7 0.2 0.3
0.1 0.2 0.3
Ireland
2.1 4.0 5.5 10.0 22.3 3.8
8.6 6.6 2.9
5.0 3.2 0.9
Greece
-3.5 2.0 5.0 2.8 -14.6 11.9
-3.2 4.9 2.2
5.0 1.6 0.7
Spain
2.4 0.2 -1.9 0.1 -11.4 4.0
6.9 3.0 0.4
10.3 0.6 1.4
France
-1.3 -1.0 0.6 -0.6 -9.1 -1.3
0.1 3.1 1.0
1.2 1.0 1.3
Italy
-1.1 -0.1 -1.8 -0.5 -5.3 3.4
2.5 0.8 0.1
4.5 0.4 0.3
Cyprus
6.2 3.1 3.1 6.5 13.2 1.5
10.4 1.3 0.9
7.0 -0.1 -1.5
Latvia
0.8 -0.6 0.0 -1.3 7.5 -5.9
3.0 1.4 -0.4
3.9 -0.9 -1.1
Lithuania
2.0 6.4 2.3 6.9 8.4 5.3
6.4 0.5 1.9
3.8 -1.2 1.2
Luxembourg
1.7 -5.0 0.0 2.0 10.6 0.2
-7.9 1.8 1.0
-4.2 -0.4 0.4
Malta
4.1 4.5 4.8 7.7 7.5 -3.1
-1.0 2.4 0.3
0.3 0.6 0.2
Netherlands
-2.8 1.3 0.5 -2.9 4.3 -3.3
-3.0 2.4 -1.2
-1.8 -0.3 -1.8
Austria
-0.8 -0.8 0.8 1.6 -2.8 -0.6
4.0 0.1 -0.6
4.2 -0.2 -2.5
Portugal
2.0 2.9 0.2 1.7 -8.7 3.0
8.0 3.9 0.1
8.4 0.3 -1.2
Slovenia
1.7 4.7 1.4 1.6 -0.1 2.5
-2.2 0.8 0.8
-0.7 1.4 0.0
Slovakia
1.0 -2.7 0.2 -1.7 1.7 -0.1
-4.0 1.5 2.8
-7.3 0.0 -0.5
Finland
1.1 2.7 -2.5 4.5 -0.2 -4.4
-3.7 0.4 0.8
-3.2 0.5 0.5
Euro area (b) (c)
-0.2 0.0 -0.5 0.3 -0.6 0.6
0.1 1.7 0.4
0.3 0.1 -0.1
Bulgaria
3.8 -1.1 -2.6 1.4 -2.9 -0.3
1.0 0.4 -0.4
0.7 -0.7 -0.7
Czechia
0.3 1.2 -0.6 -1.3 0.1 -3.2
-0.6 3.6 1.1
-0.6 1.1 0.4
Denmark
1.3 -0.5 -0.7 2.5 2.2 -1.7
1.1 0.8 -1.2
-1.0 1.9 1.6
Croatia
2.5 0.2 -1.1 3.6 -14.7 20.3
14.8 1.2 0.4
17.2 -0.3 -0.5
Hungary
-0.7 0.1 0.4 2.7 1.9 -2.1
5.1 1.8 1.2
0.7 1.7 1.2
Poland
5.1 3.0 2.5 2.4 8.1 2.0
0.0 0.9 0.5
-1.1 1.1 0.9
Romania
12.5 1.6 1.1 2.6 -1.0 1.8
1.7 2.3 1.7
1.2 1.6 1.1
Sweden
-0.6 -0.9 0.2 3.6 2.8 1.0
-0.1 1.4 0.0
-1.2 -1.7 -0.6
EU (b)
0.2 0.1 -0.3 0.6 0.0 0.4
0.2 1.7 0.4
0.2 0.2 0.1
0.3 1.7 -0.6 -1.8 -4.7 -6.2
2.7 -6.0 -2.6
1.0 -0.4 -1.5
Japan
-0.5 0.0 -1.2 -0.7 -5.2 -0.3
1.2 2.5 -0.3
-0.4 0.5 -0.8
-1.1 -1.1 -1.4 -0.7 -4.7 -4.0
0.4 1.6 -0.6
1.2 -0.1 1.2
(c) In this table, the euro area in the Autumn 2022 Forecast cosisted of 19 countries, while in the Spring 2023 Forecast it contains 20 countries, i.e. with Croatia
(a) Index for exports of goods and services divided by an index for growth of markets.
(b) Intra- and extra-EU trade.
United Kingdom
United States
Export performance (a) (percentage change on preceding year, 2016-2024)
Spring 2023
Autumn 2022
forecast
forecast
Statistical Annex
185
Table 54:
28.04.2023
( a ) 2018 2019 2020 2021 2022 2023 2024 2022 2023 2024
14.8 2.1 1.8 -5.6 5.4
3.5 1.0 1.7
3.3 0.3 1.6
12.0 1.8 1.6 -6.1 5.4
3.5 1.1 1.6
3.2 0.3 1.5
0.4 1.8 2.3 -5.4 6.3
3.2 1.2 1.4
2.8 0.2 1.5
0.1 2.7 4.0 -4.0 7.6
3.4 1.5 2.4
3.1 1.1 2.4
0.3 3.2 3.0 -5.5 3.6
2.5 0.2 2.6
2.5 0.1 1.8
0.3 2.0 1.5 -2.0 4.9
3.8 0.3 1.5
3.0 0.0 1.3
3.3 1.0 1.1 -3.7 2.6
1.8 0.2 1.4
1.6 -0.6 1.4
0.0 3.8 3.7 -0.6 8.0
-1.3 -0.4 3.1
-0.1 0.7 2.1
0.4 8.5 5.4 6.2 13.6
12.0 5.5 5.0
7.9 3.2 3.1
0.2 1.7 1.9 -9.0 8.4
5.9 2.4 1.9
6.0 1.0 2.0
1.3 2.3 2.0 -11.3 5.5
5.5 1.9 2.0
4.5 1.0 2.0
2.3 1.9 1.8 -7.8 6.8
2.6 0.7 1.4
2.6 0.4 1.5
0.1 2.8 3.4 -8.5 13.1
6.2 1.6 2.3
6.0 1.0 1.7
1.9 0.9 0.5 -9.0 7.0
3.7 1.2 1.1
3.8 0.3 1.1
0.0 5.6 5.5 -4.4 6.6
5.6 2.3 2.7
5.6 1.0 1.9
0.0 4.0 2.6 -2.3 4.3
2.8 1.4 2.8
1.9 -0.3 2.6
0.1 4.0 4.6 0.0 6.0
1.9 0.5 2.7
2.5 0.5 2.4
0.1 1.2 2.3 -0.8 5.1
1.5 1.6 2.4
1.5 1.0 2.4
0.2 5.4 4.9 -4.5 7.2
4.6 0.5 2.8
5.5 0.1 2.6
0.0 6.2 7.0 -8.6 11.8
6.9 3.9 4.1
5.7 2.8 3.7
0.7 2.4 2.0 -3.9 4.9
4.5 1.8 1.2
4.6 0.6 1.3
0.4 2.4 1.5 -6.5 4.6
5.0 0.4 1.6
4.6 0.3 1.1
1.0 5.9 4.5 -2.0 6.9
5.1 0.7 2.7
4.0 0.7 2.6
0.3 2.8 2.7 -8.3 5.5
6.7 2.4 1.8
6.6 0.7 1.7
0.4 6.0 3.9 -3.7 5.8
4.7 3.2 3.5
5.8 1.8 2.2
0.1 4.5 3.5 -4.3 8.2
5.4 1.2 2.2
6.2 0.8 1.7
0.1 4.0 2.5 -3.3 4.9
1.7 1.7 2.1
1.9 0.5 1.9
0.2 1.1 1.2 -2.4 3.0
2.1 0.2 1.4
2.3 0.2 1.4
0.4 2.0 2.0 -2.2 5.4
2.6 -0.5 1.1
2.9 -0.6 0.8
2.6 3.2 1.5 0.5 9.5
0.0 3.1 4.3
4.8 3.4 3.0
0.0 4.0 2.1 -3.3 8.9
4.8 2.9 3.8
3.2 2.6 3.4
0.0 3.8 2.9 -3.0 7.4
3.9 1.5 2.3
: : :
0.0 4.1 3.6 -8.3 13.9
-5.9 2.8 4.1
: : :
0.0 5.1 4.1 -15.3 13.0
6.1 3.0 2.9
7.0 2.9 3.2
0.0 2.9 3.9 -4.7 3.9
2.1 2.0 3.1
2.3 2.5 2.8
0.1 4.5 4.3 -0.9 7.5
2.3 1.9 3.0
2.7 2.4 3.0
2.0 3.0 0.8 1.9 11.4
5.6 3.5 4.0
5.0 3.5 3.0
0.4 3.5 3.2 -3.8 3.4
-29.1 0.6 4.0
: : :
0.1 4.9 5.1 -6.5 9.9
8.4 5.4 5.3
: : :
Iceland
0.0 4.9 1.8 -7.2 4.3
6.4 2.2 2.4
5.0 2.4 2.1
Norway
0.3 0.8 1.1 -1.3 3.9
3.3 1.7 1.9
2.5 1.8 1.9
Switzerland
0.5 2.9 1.1 -2.4 4.2
2.1 0.8 1.5
2.2 1.2 2.0
Australia
1.0 2.8 1.9 -1.9 5.2
3.6 1.5 1.6
3.8 2.5 2.4
Canada
1.4 3.2 1.9 -4.6 4.9
3.7 1.4 1.5
3.4 1.6 2.4
Japan
3.8 0.6 -0.4 -4.3 2.1
1.0 1.1 1.0
1.7 1.6 1.2
1.7 2.9 2.2 -0.7 4.1
2.6 1.3 2.2
2.2 1.6 2.0
2.3 1.7 1.6 -11.0 7.6
4.1 -0.2 1.0
4.2 -0.9 0.9
15.8 2.9 2.3 -2.8 5.9
2.1 1.4 1.0
1.8 0.7 1.7
46.1 2.5 1.8 -4.0 5.7
2.6 1.3 1.6
2.7 0.9 1.8
33.4 6.3 5.2 -1.1 7.2
4.3 5.2 5.1
4.4 4.8 5.0
- China
18.5 6.7 6.0 2.2 8.5
3.0 5.5 4.7
3.4 4.5 4.7
- India
7.0 7.3 4.6 -6.0 8.9
6.7 5.6 6.6
6.9 6.0 6.3
- Indonesia
2.4 5.2 5.0 -2.1 3.7
5.3 5.0 5.0
5.0 5.0 5.0
1.0 3.7 3.6 -1.7 5.0
3.2 3.8 4.1
-7.7 4.9 9.1
Russia
3.1 2.8 2.2 -2.7 5.6
-2.1 -0.9 1.3
-5.1 -3.2 0.9
Latin America
7.4 1.0 -0.1 -7.1 6.9
3.4 1.7 2.1
3.0 1.7 2.2
- Argentina
0.7 -2.6 -2.0 -9.9 10.4
5.2 -0.8 1.7
3.9 0.3 1.9
- Brazil
2.4 1.8 1.2 -3.3 5.0
2.9 1.0 1.3
2.5 0.8 1.0
- Mexico
1.8 2.2 -0.2 -8.0 4.7
3.1 1.6 1.7
2.2 1.4 2.1
MENA
5.7 1.8 1.3 -3.3 4.2
5.3 3.2 3.5
5.4 3.5 3.3
- Saudi Arabia
1.2 2.8 0.8 -4.3 3.9
8.7 3.4 3.1
7.6 3.7 2.9
Sub-Saharan
Africa
3.3 2.6 2.6 -2.1 4.3
3.4 3.2 3.3
3.3 3.4 3.7
0.6 1.5 0.3 -6.3 4.9
2.0 0.5 1.0
2.0 1.4 1.6
53.8 4.5 3.7 -2.3 6.6
3.9 4.1 4.2
3.4 3.8 4.3
100.0 3.6 2.8 -3.1 6.2
3.3 2.8 3.1
3.1 2.5 3.1
85.1 3.8 2.9 -2.6 6.3
3.2 3.1 3.3
3.1 2.9 3.4
87.9 3.8 3.0 -2.6 6.3
3.2 3.1 3.2
3.1 2.8 3.4
(a) Relative weights in %, based on GDP (at constant prices and PPS) in 2021.
(b) The composition of this aggregate has changed compared to the Autumn 2022 Forecast, so the data are not comparable. For details, see note 11 on concepts and sources.
Emerging and Developing Economies
World
World excluding EU
- Türkiye
- Ukraine
- South Africa
Candidate Countries (b)
World excluding euro area
Easter Neighbourhood and Central Asia (b)
Korea
United Kingdom
United States
Emerging and Developing Asia
Advanced economies
- Albania
- Bosnia and Herzegovina
Potential Candidate Countries (b)
- Montenegro
- North Macedonia
Romania
Slovenia
Slovakia
Finland
Hungary
Malta
Netherlands
Austria
Poland
- Serbia
Luxembourg
Germany
Estonia
Ireland
Greece
Spain
France
Croatia
Italy
Cyprus
Lithuania
Latvia
Sweden
- Moldova
Portugal
Denmark
World GDP, volume (percentage change on preceding year, 2018-2024)
Spring 2023
Autumn 2022
forecast
forecast
EU
Euro area
Belgium
Bulgaria
Czechia
European Economic Forecast, Spring 2023
186
Table 55:
28.04.2023
( a ) 2018 2019 2020 2021 2022 2023 2024 2022 2023 2024
31.5 3.7 3.1 -8.4 10.5
7.1 3.0 3.3
6.3 2.1 3.6
26.3 3.6 2.9 -9.0 10.7
7.0 3.1 3.3
6.6 2.0 3.4
1.6 6.9 5.0 -12.5 18.1
0.9 3.1 5.7
11.0 3.4 7.1
0.0 4.0 2.6 -27.9 52.0
7.5 3.2 4.3
7.5 3.7 4.2
0.0 7.3 0.5 -15.8 24.6
23.9 4.1 3.8
: : :
0.0 4.1 8.2 -14.9 17.5
24.9 9.8 7.9
: : :
0.0 12.8 8.9 -10.9 11.7
13.4 4.9 5.9
8.7 9.6 8.3
0.1 7.5 7.7 -4.2 19.5
17.6 6.7 7.8
9.0 5.4 6.1
1.1 8.8 4.2 -14.4 24.9
9.1 2.7 5.5
11.3 3.0 7.2
0.3 -1.4 7.3 -5.8 -8.6
-42.4 1.5 5.3
: : :
0.0 9.2 9.9 -34.3 23.9
31.5 9.8 8.0
: : :
0.0 0.4 -5.5 -31.1 14.7
20.6 3.7 3.5
17.1 5.7 3.6
0.7 -1.5 2.1 -2.3 5.8
5.9 0.5 3.0
3.3 3.5 3.0
2.1 3.4 -0.7 -5.2 12.4
4.1 1.7 3.4
5.8 2.5 3.7
1.4 5.1 3.2 -9.7 -2.0
3.3 6.5 4.0
7.0 6.0 5.1
2.3 3.8 2.7 -8.8 1.4
3.4 3.2 2.5
3.3 1.8 2.4
3.3 3.8 -1.5 -11.6 11.7
4.9 4.3 2.8
3.7 3.3 3.0
2.8 4.0 0.2 -1.7 10.8
3.3 -2.0 2.4
3.1 2.7 2.2
3.3 3.1 1.7 -12.1 2.2
9.9 -4.2 0.2
7.3 1.7 1.9
9.2 2.8 0.5 -13.2 6.1
7.1 3.6 2.6
7.2 2.9 4.8
65.9 3.7 1.7 -8.7 9.6
6.0 2.5 3.2
5.8 2.6 3.7
19.8 4.5 0.0 -1.4 16.8
1.5 2.0 3.0
2.8 2.5 2.8
12.9 4.0 0.4 2.6 17.4
-0.7 1.1 2.3
1.3 1.1 1.8
2.3 4.9 -2.2 -6.6 20.1
4.9 4.9 4.7
4.9 5.6 4.9
0.9 3.5 -3.8 -8.0 22.1
4.1 1.0 1.0
4.1 1.0 1.0
0.6 6.2 3.5 -6.4 -2.1
7.0 7.6 5.1
-5.6 6.2 11.2
2.0 5.6 0.7 -4.2 3.3
-13.9 -2.5 1.7
-7.5 -5.0 2.6
5.0 3.3 0.6 -10.2 7.6
7.3 4.0 5.1
6.0 4.4 4.6
0.3 -0.4 12.3 -12.9 12.6
5.7 0.6 3.3
5.5 2.7 3.3
1.1 3.4 -1.7 -1.3 2.3
8.2 5.6 5.0
3.6 4.4 3.1
1.9 6.0 1.5 -7.3 7.1
7.6 1.4 3.9
7.2 2.7 3.8
MENA
5.3 3.9 -1.5 -10.8 6.1
8.4 2.0 3.2
8.7 4.3 4.0
1.0 8.8 -3.4 -14.4 5.5
19.7 5.6 6.2
7.9 6.0 4.2
1.4 2.0 1.1 -9.4 0.0
3.6 4.3 5.0
3.4 4.2 4.9
0.5 2.7 -3.4 -11.9 10.0
5.9 4.0 5.0
5.9 3.7 4.0
34.1 4.2 0.0 -5.0 12.2
2.7 2.3 3.4
3.4 2.8 3.5
100.0 3.8 1.1 -7.5 10.4
4.9 2.4 3.2
5.0 2.7 3.6
68.5 3.9 0.2 -7.0 10.4
3.9 2.2 3.2
4.3 2.9 3.7
73.7 3.9 0.5 -6.9 10.4
4.2 2.2 3.2
4.4 2.9 3.7
Sub-Saharan Africa
World
World excluding euro area
World excluding EU
Japan
Korea
- Argentina
- Brazil
United States
Advanced economies
Emerging and Developing Asia
Latin America
United Kingdom
- Moldova
- Türkiye
- Ukraine
(c) The composition of this aggregate has changed compared to the Autumn 2022 Forecast, so the data are not comparable. For details, see note 11 on concepts and sources.
(b) Intra- and extra-EU trade.
- China
- India
- Indonesia
Easter Neighbourhood and Central Asia (c)
Russia
Emerging and developing economies
(a) Relative weights in %, based on exports of goods and services (at current prices and current exchange rates) in 2021.
- South Africa
- Mexico
- Saudi Arabia
Iceland
EU (b)
Euro area (20) (b)
- Albania
- Bosnia and Herzegovina
Candidate Countries (c)
World exports of goods and services, volume (percentage change on preceding year, 2018-2024)
Spring 2023
Autumn 2022
forecast
forecast
- North Macedonia
- Serbia
Switzerland
Australia
Canada
Potential Candidate Countries (c)
Norway
28.04.2023
EU Euro Area
Candidate
Countries
USA
United
Kingdom
Japan
Other
Advanced
Economies
China Rest of Asia Russia MENA
Latin
America
Sub-
Saharan
Africa
EU
61.1 48.8 2.5 7.3 4.9 1.2 8.7 4.4 1.0 1.5 2.9 2.2 1.2
Euro area
59.4 47.7 2.3 7.9 5.1 1.3 9.2 4.7 1.1 1.5 3.1 2.4 1.3
Belgium
68.0 60.4 1.6 5.2 6.1 1.5 6.0 1.7 0.9 0.7 2.7 1.7 2.2
Bulgaria
65.8 47.0 11.3 2.6 1.7 0.2 3.1 3.8 1.0 1.3 3.8 0.8 1.0
Czechia
79.0 64.9 2.4 2.6 3.3 0.7 4.2 2.0 0.4 1.8 1.4 1.0 0.4
Denmark
53.9 37.4 1.5 9.7 5.2 2.0 13.1 5.7 1.6 1.0 2.5 2.9 0.9
Germany
55.2 38.7 2.4 8.6 4.7 1.4 11.1 7.5 1.3 1.8 2.2 2.6 0.9
Estonia
67.3 50.2 2.0 9.5 2.8 0.8 8.0 1.3 0.4 3.4 1.3 1.0 0.6
Ireland
38.7 35.5 0.6 29.6 9.1 2.2 7.5 6.9 2.0 0.6 1.3 1.6 0.6
Greece
52.7 39.4 11.3 4.0 3.0 1.0 6.7 2.0 1.2 0.6 12.0 1.3 1.2
Spain
61.1 54.8 2.2 4.8 5.6 1.2 6.6 3.0 0.8 0.8 6.0 4.6 1.3
France
53.3 46.4 1.9 7.6 5.4 1.6 11.0 5.6 1.3 1.6 4.9 2.4 1.9
Croatia
68.0 51.8 15.9 3.6 1.0 0.3 3.3 1.1 1.5 1.2 2.0 0.4 0.2
Italy
51.5 42.3 3.3 9.6 4.2 1.7 11.9 3.9 1.3 1.7 5.0 2.9 1.1
Cyprus
36.9 28.3 0.9 1.9 5.6 0.0 5.0 1.1 9.5 1.6 17.9 4.6 4.9
Latvia
65.9 50.1 2.8 2.9 7.6 0.5 4.9 1.1 0.3 7.0 1.4 0.6 2.4
Lithuania
61.1 42.9 5.5 6.1 3.8 0.3 6.5 0.9 0.6 6.7 1.4 1.1 1.6
Luxembourg
78.7 71.2 1.1 2.7 2.2 0.5 6.0 2.3 0.7 0.9 1.6 1.6 0.7
Hungary
75.6 58.4 5.3 3.8 2.4 0.6 3.9 2.7 0.5 1.5 1.4 1.6 0.3
Malta
43.0 34.1 2.1 4.2 2.6 3.8 19.3 7.0 3.6 0.4 7.0 2.0 4.1
Netherlands
71.8 61.4 1.1 4.5 5.7 0.5 6.8 2.1 0.6 0.9 1.7 1.7 1.4
Austria
68.3 53.1 2.1 6.7 2.4 1.0 9.7 3.4 0.8 1.2 1.5 1.8 0.5
Poland
75.3 59.6 3.5 2.8 4.7 0.3 4.0 1.4 0.6 2.3 1.5 1.2 0.6
Portugal
67.0 61.7 1.5 6.0 4.9 0.5 4.6 2.8 0.4 0.6 3.5 2.7 3.8
Romania
69.8 52.7 7.6 2.7 2.9 0.8 4.0 2.6 0.5 1.6 4.8 1.0 0.7
Slovenia
70.7 54.9 7.7 2.4 1.3 0.2 10.2 1.1 0.4 1.9 1.8 0.6 0.3
Slovakia
76.5 44.9 2.5 3.9 3.2 0.3 3.4 4.8 0.1 1.7 1.4 0.8 0.3
Finland
55.3 39.2 2.1 7.5 3.7 2.3 11.4 5.8 1.5 4.8 2.1 2.8 1.2
Sweden
55.3 41.6 1.5 8.2 5.1 1.6 15.2 4.7 1.0 1.4 2.6 2.2 0.9
Table 56: Export shares in EU trade (goods only - 2021)
Statistical Annex
187
Table 57:
28.04.2023
( a ) 2018 2019 2020 2021 2022 2023 2024 2022 2023 2024
30.4 4.2 4.6 -7.9 9.1
7.9 2.1 3.2
6.7 1.9 3.5
25.2 3.9 4.8 -8.5 8.4
8.0 2.3 3.2
6.8 1.9 3.5
1.7 -2.4 -0.9 1.1 7.4
4.9 3.9 5.1
6.6 2.3 5.7
0.0 2.4 2.3 -19.8 31.5
13.1 2.6 3.8
6.9 2.0 2.7
0.0 3.9 1.3 -13.4 20.5
24.0 2.3 4.0
: : :
- Moldova
0.0 8.4 6.2 -9.5 21.2
15.8 7.7 6.9
: : :
- North
Macedonia
0.0 10.7 10.1 -10.9 11.9
16.1 5.8 5.1
13.6 7.9 6.7
0.1 10.8 10.7 -3.6 17.7
17.8 5.3 6.2
9.1 4.6 5.0
- Türkiye
1.1 -6.2 -5.0 6.7 2.4
7.9 3.9 4.7
5.9 1.9 5.8
- Ukraine
0.3 2.8 5.7 -6.4 14.2
-18.5 3.0 6.2
: : :
0.1 10.9 6.6 -12.4 8.4
12.2 7.5 6.6
: : :
Iceland
0.0 -0.9 -9.1 -20.6 19.9
19.7 3.2 3.7
13.3 4.7 3.1
Norway
0.5 1.4 5.3 -9.9 1.7
9.3 0.3 3.4
8.0 3.0 3.3
1.8 0.8 0.3 -3.2 5.0
5.9 2.5 2.9
6.9 2.7 4.2
Australia
1.1 4.3 -1.0 -12.8 5.4
12.6 3.3 3.0
8.9 4.9 3.6
Canada
2.3 3.3 0.4 -9.3 7.8
9.7 0.4 2.5
9.6 3.0 2.5
Japan
3.6 3.8 1.0 -6.8 5.0
7.9 3.9 2.1
5.0 2.2 1.4
2.6 1.7 -1.9 -3.1 10.1
3.7 0.0 2.3
7.1 3.4 2.8
United Kingdom
3.6 3.3 2.6 -16.0 6.2
13.3 -7.9 -0.9
12.9 -1.2 1.3
12.9 4.2 1.1 -9.0 14.1
8.1 -1.6 0.9
8.5 -1.1 1.9
67.6 3.8 2.2 -7.8 9.9
7.7 0.9 2.5
7.3 1.5 3.0
19.1 7.1 -3.5 -5.1 12.4
-1.3 3.4 4.9
0.2 4.4 5.2
- China
11.7 7.3 -3.7 -0.4 8.9
-5.3 3.2 4.9
-2.9 4.0 4.9
- India
2.7 4.0 -3.9 -13.9 20.4
6.1 4.8 5.7
6.1 4.8 5.7
- Indonesia
0.8 15.0 -9.7 -15.3 16.1
3.0 3.6 5.0
3.0 3.6 5.0
0.6 5.5 9.2 -17.4 -1.9
6.9 5.7 5.9
-8.6 6.8 12.0
Russia
1.4 2.7 3.1 -11.9 19.1
-15.0 2.8 2.9
-18.4 1.0 5.0
Latin America
5.4 4.7 -1.0 -12.9 18.7
7.5 2.3 3.8
5.3 3.1 3.9
- Argentina
0.3 -6.1 -21.0 -10.5 29.8
17.4 -3.0 2.9
11.9 1.1 3.9
- Brazil
1.2 7.3 4.5 -8.2 17.4
10.6 2.7 4.8
0.5 2.7 4.6
- Mexico
2.1 6.4 -0.7 -13.7 15.6
8.8 2.1 3.6
9.3 3.6 3.9
MENA
4.4 1.1 -0.9 -14.7 7.1
8.6 2.1 2.6
9.6 3.8 3.8
0.8 2.2 2.9 -16.2 4.8
8.8 7.4 6.3
8.1 8.5 9.1
Sub-Saharan
Africa
1.4 6.1 7.7 -13.3 0.6
7.2 5.1 4.4
7.6 4.8 4.8
0.4 3.2 0.4 -17.4 9.5
13.2 5.0 5.0
13.0 4.7 5.0
32.4 5.4 -1.6 -8.9 12.0
1.5 3.1 4.3
1.5 4.1 4.9
100.0 4.3 1.0 -8.2 10.6
5.7 1.6 3.1
5.4 2.3 3.6
World excluding
EU
69.6 4.3 -0.6 -8.3 11.3
4.8 1.4 3.0
4.8 2.5 3.7
74.8 4.4 -0.3 -8.1 11.3
4.9 1.4 3.0
4.9 2.5 3.7
United States
Easter Neighbourhood and Central Asia (c)
Emerging and developing Asia
Advanced economies
(b) Intra- and extra-EU trade.
- Saudi Arabia
Emerging and developing economies
(a) Relative weights in %, based on imports of goods and services (at current prices and current exchange rates) in 2021.
- South Africa
World
World excluding euro area
(c) The composition of this aggregate has changed compared to the Autumn 2022 Forecast, so the data are not comparable. For details, see note 11 on concepts and sources.
- Serbia
Switzerland
Potential Candidate Countries (c)
World imports of goods and services, volume (percentage change on preceding year, 2018-2024)
Spring 2023
Autumn 2022
forecast
forecast
EU (b)
Euro area (b)
- Albania
- Bosnia and Herzegovina
Candidate Countries (c)
Korea
28.04.2023
EU Euro Area
Candidate
Countries
USA
United
Kingdom
Japan
Other
Advanced
Economies
China Rest of Asia Russia MENA
Latin
America
Sub-
Saharan
Africa
EU
61.7 49.6 2.4 4.2 3.0 1.1 6.8 8.3 2.1 2.1 2.4 1.7 1.1
Euro area
60.0 48.5 2.1 4.7 3.3 1.2 7.0 8.2 2.2 2.2 2.8 1.9 1.3
Belgium
61.8 56.1 1.3 6.5 4.0 1.8 6.7 5.9 1.8 1.8 2.0 2.1 1.8
Bulgaria
61.3 42.7 13.3 0.7 0.8 0.5 2.8 5.3 1.0 1.0 1.7 2.6 0.3
Czechia
74.5 58.6 2.2 2.0 1.2 1.1 4.1 9.1 1.4 1.4 0.3 0.3 0.2
Denmark
68.3 48.3 1.4 3.3 2.5 0.4 7.0 8.7 2.4 2.4 0.4 1.5 0.4
Germany
63.8 45.5 2.1 4.5 2.6 1.4 8.4 8.0 2.3 2.3 0.7 1.3 1.1
Estonia
69.7 53.1 1.2 1.6 1.1 0.6 3.2 4.2 0.6 0.6 0.4 0.3 0.7
Ireland
38.1 33.5 1.0 15.0 23.8 1.0 7.0 6.0 1.8 1.8 0.5 1.2 0.5
Greece
49.3 39.9 5.2 2.0 1.1 0.3 4.5 10.7 1.0 1.0 12.0 1.0 0.7
Spain
55.4 48.7 2.9 4.1 2.5 0.6 5.7 8.7 2.2 2.2 6.4 4.6 2.7
France
66.4 59.1 1.5 4.3 3.5 0.9 6.1 6.5 1.6 1.6 3.8 1.1 1.1
Croatia
73.3 55.9 8.1 2.0 0.5 0.1 2.0 4.5 0.3 0.3 1.7 0.5 0.6
Italy
56.3 47.2 3.5 3.5 1.9 0.9 5.5 7.7 1.9 1.9 6.9 1.9 1.3
Cyprus
65.5 58.5 2.6 1.7 3.4 1.0 5.9 6.1 1.5 1.5 1.6 2.1 0.6
Latvia
68.0 52.1 1.8 1.2 1.6 0.2 4.3 4.2 1.1 1.1 0.1 0.8 0.2
Lithuania
66.9 45.8 2.2 2.7 1.3 0.3 3.0 4.7 0.4 0.4 0.3 0.4 0.3
Luxembourg
83.6 79.6 0.4 4.2 2.0 1.8 2.5 3.2 0.7 0.7 0.2 0.2 0.6
Hungary
72.3 56.5 3.9 1.8 1.0 1.2 5.7 7.7 1.8 1.8 0.2 0.4 0.1
Malta
36.6 34.8 3.6 0.9 2.6 1.0 20.3 8.6 0.9 0.9 11.5 1.5 0.4
Netherlands
42.3 35.9 1.2 7.1 4.4 1.7 8.7 15.6 3.9 3.9 1.9 3.5 1.8
Austria
78.3 64.4 2.1 1.8 1.2 0.6 6.7 3.4 1.9 1.9 0.8 0.3 0.1
Poland
66.9 56.7 3.0 1.7 1.3 0.8 4.3 10.4 1.7 1.7 1.3 0.9 0.4
Portugal
72.8 67.4 1.9 2.4 1.4 0.7 3.4 5.0 1.1 1.1 2.1 3.6 2.2
Romania
72.2 51.3 7.9 1.1 1.0 0.4 2.8 6.1 0.6 0.6 1.2 0.6 0.2
Slovenia
56.2 46.5 8.8 0.4 0.7 0.3 16.0 10.8 1.5 1.5 1.4 1.1 0.4
Slovakia
78.7 42.3 2.4 0.4 1.2 0.1 4.6 4.3 2.1 2.1 0.5 0.1 0.0
Finland
69.6 44.5 0.9 2.0 1.4 0.5 4.9 4.5 1.1 1.1 0.2 1.8 0.5
Sweden
68.5 52.9 1.2 2.9 3.3 0.7 11.6 6.5 1.9 1.9 0.4 0.8 0.3
Table 58: Import shares in EU trade (goods only - 2021)
European Economic Forecast, Spring 2023
188
Table 59:
28.04.2023
2017 2018 2019 2020 2021 2022 2023 2024 2022 2023 2024
458.0 381.4 400.7 460.9 377.3
-16.7 278.9 338.9
-64.2 -35.4 51.5
286.0 204.2 246.5 283.9 194.0
-170.7 234.0 281.0
-59.9 -36.6 53.2
436.7 382.5 384.2 425.5 378.0
34.6 272.7 320.8
3.0 40.3 118.6
300.0 232.6 265.9 291.6 236.4
-80.5 228.8 266.0
19.3 59.8 141.6
-85.3 -63.6 -49.6 -64.9 -55.1
-126.1 -140.1 -158.1
-95.7 -102.7 -137.9
-3.2 -3.4 -3.5 -3.4 -4.5
-4.5 -5.1 -5.4
-4.8 -4.9 -5.2
-4.3 -4.5 -4.6 -3.7 -4.3
-5.4 -6.1 -6.6
: : :
-2.6 -3.3 -3.3 -3.1 -4.2
-5.0 -5.7 -6.3
: : :
-2.0 -2.1 -2.2 -2.1 -1.4
-3.6 -4.1 -4.3
-3.2 -3.3 -3.4
-4.5 -6.0 -6.3 -5.9 -7.1
-9.9 -10.5 -11.4
-9.2 -9.5 -10.1
-57.0 -29.2 -13.2 -38.2 -24.6
-74.6 -84.1 -95.4
-75.9 -82.4 -116.3
-9.7 -12.7 -14.3 -6.8 -6.6
-20.3 -21.1 -25.3
: : :
-6.3 -6.8 -6.6 -5.7 -6.5
-7.9 -9.7 -10.5
: : :
-1.5 -1.5 -0.9 -0.6 -1.1
-1.6 -1.4 -1.7
-1.4 -1.5 -1.5
23.9 35.1 16.3 -1.0 60.5
163.4 94.2 83.0
73.4 82.5 91.8
64.5 72.3 71.4 63.5 109.8
93.5 96.5 104.3
113.7 115.5 120.4
10.5 20.8 48.1 40.5 87.5
112.6 87.1 87.9
85.3 84.6 89.7
-19.1 -16.8 -14.2 -30.0 3.7
17.3 -26.9 -33.7
29.7 18.8 13.3
43.8 10.2 1.4 26.0 15.2
-120.4 -93.2 -58.1
-87.7 -79.1 -64.3
113.6 110.1 79.8 80.6 75.7
15.1 1.4 8.3
-12.6 -12.9 -6.4
-182.0 -191.3 -189.0 -171.4 -232.8
-284.7 -265.4 -271.2
-316.5 -323.2 -332.5
-823.2 -889.8 -871.9 -884.5 -1103.2
-1213.0 -1111.6 -1097.3
-1226.1 -1155.5 -1141.6
-245.4 -404.4 -377.0 -308.8 -456.1
-1176.6 -930.9 -828.5
-1309.3 -1195.9 -1089.3
367.5 199.2 259.9 508.1 461.4
462.6 426.9 375.4
583.2 525.3 493.1
475.9 380.1 393.0 511.1 562.7
668.6 631.8 601.1
767.3 668.2 653.0
-148.1 -186.7 -157.7 -95.4 -176.7
-268.5 -257.3 -269.4
-284.6 -249.4 -257.0
18.8 -0.2 3.5 28.3 43.8
62.7 53.1 42.2
54.6 45.5 35.2
15.9 26.0 15.4 2.6 19.6
50.6 40.3 40.8
27.4 14.1 8.9
114.7 195.9 165.8 92.3 189.8
296.9 183.7 181.2
304.2 310.0 321.1
33.8 10.8 19.8 72.3 18.9
17.9 37.9 52.0
24.6 41.5 57.5
-5.4 -0.7 18.2 14.6 18.7
12.4 14.4 15.7
15.5 15.9 14.7
57.3 43.4 26.5 32.4 36.4
44.2 47.7 47.3
35.0 37.9 37.1
-11.0 -13.8 5.2 34.2 -10.9
-26.6 -26.6 -26.5
-13.1 -13.5 -8.6
169.4 326.3 239.1 76.4 303.5
533.9 428.7 371.8
508.0 448.6 383.1
98.5 168.7 121.3 47.9 136.5
244.3 209.1 194.2
253.1 219.0 201.9
15.4 27.3 2.5 -4.1 34.4
27.9 20.7 19.0
39.1 34.8 33.4
4.4 1.8 2.7 17.8 30.6
21.2 15.7 14.2
27.6 23.6 22.6
716.8 785.4 702.5 747.7 1027.5
1389.8 1138.1 1040.2
1486.5 1374.2 1297.1
471.5 381.1 325.6 438.9 571.5
213.3 207.2 211.7
177.2 178.3 207.8
13.5 -0.3 -75.1 -22.0 194.1
230.0 -71.7 -127.2
241.4 213.7 156.2
34.8 -1.4 -58.7 13.4 193.5
178.7 -65.4 -109.2
174.2 138.0 89.2
2) The composition of this aggregate has changed compared to the Autumn 2022 Forecast, so the data are not comparable. For details, see note 11 on concepts and sources.
1) See note 8 on concepts and sources. Data of the previous forecast (Autumn 2022) are not fully comparable for the euro area. The euro area consists of 20 countries, while in the previous forecast this variable was aggregated for 19 countries (without Croatia).
World excluding euro area
MENA
Sub-Saharan Africa
- South Africa
Emerging and Developing Economies
World
Easter Neighbourhood and Central Asia
2)
- Saudi Arabia
Russia
- Mexico
World excluding EU
Latin America
- Argentina
- Brazil
Canada
Japan
Korea
United Kingdom
United States
- China
- India
- Indonesia
Advanced economies
Emerging and Developing Asia
World merchandise trade balances (fob-fob, in billions of US dollar, 2017-2024)
Spring 2023
Autumn 2022
forecast
forecast
EU
EU, adjusted
1)
Euro area
Euro area, adjusted
1)
Candidate Countries
2)
- Serbia
Norway
- Albania
Iceland
Australia
Switzerland
- Moldova
- North Macedonia
- Bosnia and Herzegovina
Potential Candidate Countries
2)
- Türkiye
- Ukraine
Statistical Annex
189
Table 60:
28.04.2023
2017 2018 2019 2020 2021 2022 2023 2024 2022 2023 2024
491.1 500.5 410.8 381.1 540.3
79.3 364.2 447.3
175.2 226.2 327.2
348.5 308.8 302.0 248.1 317.2
-92.4 305.5 370.9
163.4 233.7 338.1
454.3 483.2 369.9 319.2 506.3
80.7 336.0 395.7
207.9 259.5 344.1
309.6 273.8 241.0 160.4 240.7
-129.6 281.9 328.0
193.8 268.5 356.1
-49.4 -34.3 -6.6 -37.3 -25.6
-55.2 -56.7 -54.2
-55.7 -49.6 -58.7
-1.0 -1.0 -1.2 -1.3 -1.4
-1.1 -1.3 -1.4
-1.5 -1.5 -1.5
-0.9 -0.7 -0.5 -0.7 -0.6
-1.1 -1.1 -1.3
: : :
-0.5 -1.1 -1.2 -1.1 -2.1
-2.3 -2.5 -2.5
: : :
-0.1 0.0 -0.4 -0.4 -0.4
-0.8 -0.7 -0.7
-1.1 -0.7 -0.5
-2.3 -2.4 -3.6 -2.2 -2.7
-4.4 -4.2 -4.2
-5.4 -5.2 -4.8
-40.5 -21.7 5.3 -35.6 -14.1
-51.6 -49.3 -42.9
-47.1 -41.6 -51.1
-3.5 -6.5 -4.2 5.1 -3.8
6.9 3.0 -0.3
: : :
Iceland
1.2 1.1 1.6 0.4 -0.5
-0.1 0.1 0.0
0.0 0.1 0.2
Norway
25.4 39.4 15.5 4.1 65.9
168.0 98.2 87.3
87.8 96.7 107.2
Switzerland
32.4 30.6 24.7 8.1 56.8
59.1 60.9 69.2
67.5 69.4 72.3
Australia
-35.6 -31.6 6.2 32.5 50.8
19.8 45.6 45.6
68.1 62.6 68.3
Canada
-46.2 -41.2 -34.0 -35.4 -5.4
-8.0 -45.4 -52.6
12.8 -0.2 -4.5
Japan
203.1 176.6 176.6 147.8 196.6
88.2 111.6 152.3
29.5 45.6 68.6
Korea
75.2 77.5 59.7 75.9 85.2
29.8 -1.0 7.3
-17.5 -14.3 -6.1
-97.0 -117.2 -80.8 -86.7 -46.9
-115.9 -70.9 -57.8
-170.7 -179.8 -178.7
United States
-371.4 -441.2 -452.6 -592.5 -861.4
-994.7 -875.2 -836.1
-966.5 -848.8 -776.0
Advanced economies
382.4 293.5 260.8 69.9 273.2
-524.4 -177.2 31.2
-567.9 -370.6 -137.1
Emerging and Developing Asia
181.1 -41.4 102.1 337.8 313.7
313.2 217.8 189.1
340.2 300.5 265.5
- China
188.7 24.1 102.9 248.8 352.9
401.9 303.5 273.8
452.5 372.7 336.6
- India
-38.2 -65.6 -29.8 32.7 -33.4
-80.3 -72.1 -75.0
-123.5 -85.8 -84.7
- Indonesia
-16.2 -30.6 -30.3 -4.4 3.5
13.2 1.2 2.8
8.2 -2.4 0.4
-9.0 1.8 -9.3 -9.4 1.5
34.1 7.8 2.6
24.8 14.0 -0.7
32.1 115.8 65.7 35.3 122.2
227.9 104.2 97.8
237.5 220.2 226.9
-97.9 -143.6 -108.7 -13.1 -98.0
-95.0 -78.3 -72.1
-74.1 -64.3 -52.0
-31.2 -27.1 -3.5 3.1 6.7
-3.8 -2.4 -3.0
0.9 0.6 -1.5
- Brazil
-25.3 -54.8 -68.0 -28.2 -46.4
-56.1 -52.1 -57.2
-37.1 -39.5 -42.0
- Mexico
-22.0 -26.1 -5.6 22.8 -8.2
-13.4 -18.2 -21.0
-14.5 -18.0 -15.5
MENA
32.1 178.3 96.1 -32.1 173.5
405.5 231.3 144.1
465.8 436.2 320.6
- Saudi
Arabia
10.5 72.0 38.2 -22.8 44.3
163.7 77.3 46.0
172.4 144.2 123.7
-24.6 -24.7 -45.0 -34.2 -4.3
-23.0 -38.3 -46.2
-12.7 -26.0 -32.7
-9.1 -12.2 -10.0 6.8 15.6
-1.9 -7.9 -10.1
5.5 -1.9 -3.5
113.9 86.1 101.0 284.3 508.6
862.7 444.5 315.3
981.4 880.7 727.7
496.3 379.6 361.8 354.2 781.8
338.4 267.4 346.5
413.5 510.2 590.6
5.2 -120.9 -49.0 -27.0 241.5
259.1 -96.8 -100.8
238.3 283.9 263.4
42.0 -103.6 -8.1 34.9 275.5
257.6 -68.6 -49.2
205.6 250.7 246.5
2) The composition of this aggregate has changed compared to the Autumn 2022 Forecast, so the data are not comparable. For details, see note 11 on concepts and sources.
World excluding euro area
- South Africa
Emerging and Developing Economies
World excluding EU
1) See note 8 on concepts and sources. Data of the previous forecast (Autumn 2022) are not fully comparable for the euro area. The euro area consists of 20 countries, while in the previous forecast this variable was aggregated for 19 countries (without Croatia).
Latin America
Sub-Saharan Africa
World
Russia
- Argentina
Easter Neighbourhood and Central Asia
2)
- North Macedonia
- Serbia
- Türkiye
- Ukraine
United Kingdom
World current-account balances (in billions of US dollar, 2017-2024)
Spring 2023
Autumn 2022
forecast
forecast
- Moldova
EU
EU, adjusted
1)
Euro area
Euro area, adjusted
1)
Candidate Countries
2)
- Bosnia and Herzegovina
- Albania
Table 61:
28.04.2023
2017 2018 2019 2020 2021 2022 2023 2024 2022 2023 2024
23.9 29.4 -9.3 -35.1 69.3 42.5
-24.2 -5.6
-32.3 47.5 -3.7
54.8 71.0 64.3 41.8 70.7 100.7
76.3 72.1
43.4 63.9 61.6
48.5 60.1 57.5 36.6 59.8 95.7
69.9 65.6
38.0 53.1 51.2
Crude oil prices, 2017-2024
Spring 2023
Autumn 2022
forecast
forecast
Annual percentage change (USD)
Price per barrel
- Brent (USD)
- Brent (EUR)
European Economic Forecast, Spring 2023
190
1.
2. 9.
10.
3. 11.
4.
5.
6.
Armenia, Azerbaijan, Belarus, Kazakhstan, Uzbekistan, Tajikistan,
Turkmenistan.
Quarterly EU and euro-area GDP growth rates are aggregated using
estimates for 25 Member States (excluding IE and HR), but including
unpublished quarterly forecasts for CY, EL, MT and PL.
Advanced economies :
EU (EA20, BG, CZ, DK, HU, PL, RO, and SE).
Candidate countries :
Georgia, Kosovo (under United Nations Security Council
Resolution 1244/99).
EA20 (BE, DE, EE, IE, EL, ES, FR, HR, IT, CY, LV, LT, LU, MT, NL, AT, PT,
SI, SK, and FI).
Euro area 19 :
EA19 (BE, DE, EE, IE, EL, ES, FR, IT, CY, LV, LT, LU, MT, NL, AT, PT, SI,
SK, and FI).
EU and euro-area data are aggregated using exchange rates. World GDP
is aggregated using Purchasing Power Standards (PPS). In the tables on
world trade and international payments, the aggregation is carried out on
the basis of current exchange rates. Tables 48 - 51, 59 and 60 show also EU
and euro-area "adjusted" balances. Theoretically, balances of EU and
euro area vis-à-vis third countries should be identical to the sum of the
balances of the individual countries in the EU or the euro area. However,
intra-EU or intra-euro-area balances are non-zero because of reporting
errors. The creation of the internal market in 1993 reduced border controls
and formalities, and accordingly the scope and precision of intra-EU trade
coverage.
8.
Sub-Saharan Africa :
All countries in that region except the African MENA countries.
7.
Source: National Accounts (ESA 2010), except for US current-account in
tables 49, 51, and 60 (Balance of Payments). Discrepancies with balance
of payments statistics may arise due to methodological differences and
revision schedules.
All countries in that region.
MENA (Middle East and Northern Africa) :
Algeria, Tunisia, Morocco, Egypt, Israel, Jordan, Lebanon, Lybia,
Iraq, Iran, Yemen, Saudi Arabia, Bahrain, Oman, United Arab
Emirates, Kuwait, and Qatar.
EU, United Kingdom, candidate countries, Iceland, Norway,
Switzerland, Australia, Canada, Hong Kong, Japan, Korea, New
Zealand, Singapore, Taiwan and the United States.
Emerging and developing Asia:
All countries in that region except the ones included in the
Advanced economies and the Asian MENA countries.
Latin America :
Employment data used in tables 24 and 26-30 are based on full-time-
equivalents (FTEs), where available. Currently, Spain, France, Italy, the
Netherlands and USA report FTE data. In the absence of FTE data,
employment is based on numbers of persons. In the calculation of EU and
euro-area aggregates, priority is given to FTE data, as this is regarded as
more representative of diverse patterns of working time.
Albania, Bosnia and Herzegovina, Moldova, Montenegro, North
Macedonia, Serbia, Türkiye and Ukraine.
Eastern Neighbourhood and Central Asia:
The potential output gap is calculated with reference to potential output
as estimated via a production function, where the increase in the capital
stock and the difference between actual unemployment and the NAWRU
play a key role.
Potential candidates :
European Union :
EU and euro area aggregates for general government debt are published
on a non-consolidated basis (i.e. not corrected for intergovernmental
loans, including those made through the European Financial Stability
Facility).
Geographical zones are defined as follows :
Data for 2023 and 2024 are forecasts. The source for all tables is the
European Commission, unless otherwise stated. Historical data for the
Member States are based on the European System of Accounts (ESA
2010). US national accounts are based on SNA 2008, whilst the Japanese
accounts use SNA 1993. Due to differences in revision schedules of annual
and quarterly national accounts, annual and quarterly figures may not be
fully consistent for some Member States.
Euro area :
Tables 5 and 6 on domestic demand and final demand respectively,
present data including inventories.
Note on concepts and sources
The directorate general for economic and financial affairs (DG ECFIN)
produces, under its own responsibility, short-term fully-fledged economic
forecasts in Spring and Autumn. These forecasts cover the principal
macroeconomic aggregates for the Member States, the candidate
countries, the European Union as a whole, the euro area and the
international environment.
Typically, intra-EU imports are underestimated compared to intra-EU
exports, leading to an overestimation of the surplus. For the past the
"adjusted" balances are Eurostat estimates for EU and ECB estimates for the
euro area. For the future, they are ECFIN's forecasts based on the
extrapolation of the discrepancies observed in 2021.
In Tables 17a and 18, the data are based on the national index for the
United Kingdom, USA and Japan.
PREVIOUS EUROPEAN ECONOMIC FORECASTS
191
1. Forecast publications (2017-2023)
Winter 2023: EU Economy set to avoid recession, but headwinds persist
February 2023
Autumn 2022: The EU economy at a turning point
November 2022
July 2022
Spring 2022: Russian invasion tests EU economic resilience
May 2022
Winter 2022: Growth expected to regain traction after winter slowdown
February 2022
Autumn 2021: From recovery to expansion, amid headwinds
November 2021
Summer 2021: Reopening fuels recovery
July 2021
Spring 2021: Rolling up sleeves
May 2021
Winter 2021: A challenging winter, but light at the end of the tunnel
February 2021
Autumn 2020: Rebound interrupted
November 2020
Summer 2020: A deeper recession with wider divergences
July 2020
Spring 2020: A deep and uneven recession, an uncertain recovery
May 2020
Winter 2020: Offsetting forces confirm subdued growth
February 2020
Autumn 2019: A challenging road ahead
November 2019
Summer 2019: Growth clouded by external factors
July 2019
Spring 2019: Growth continues at a more moderate pace
May 2019
Winter 2019: Growth moderates amid high uncertainty
February 2019
Autumn 2018: Less dynamic growth amid high uncertainty
November 2018
Summer 2018: Resilient growth amid increased uncertainty
July 2018
Spring 2018: Expansion to continue amid new risks
May 2018
Winter 2018: A solid and lasting expansion
February 2018
Autumn 2017: Continued growth in a changing policy context
November 2017
Spring 2017: Steady growth rates ahead
May 2017
Winter 2017: Navigating through choppy waters
February 2017
2. Selected economic analyses (2017-2023)
Global trade fragmentation risks
February 2023
Selling price expectations and core inflation
business surveys
Commodity-driven inflation: Macro effects and risks
November 2022
Can the EU labour market withstand a slowdown in economic activity?
The effect of rising energy and consumer prices on household finances, material
deprivation and energy poverty in the EU
Future prices in forecast assumptions
European Economic Forecast, Spring 2023
192
Household wealth and savings in the euro area the effect of inflation
Exchange rate pass-through to euro-area consumer price inflation
Fiscal policy measures to mitigate the impact of high energy prices
July 2022
financial situation insights from the
Stagflation risks in Europe: Are the 2020s different from the 1970s?
Alternative scenarios on the economic outlook
May 2022
Carry-over effects and the annual growth forecast for 2022
Production bottlenecks based on the Business and Consumer Surveys
February 2022
An update on energy price development: pass-through from wholesale to retail
Business managers are upbeat about investment this year
Supply side bottlenecks
November 2021
Energy prices
Labour market: slack or tight?
Housing market
New survey-based measures of economic uncertainty
Selling price expectations of business managers on the rise
July 2021
An update on the tourism sector in the EU: insights from early 2021 data
The role of savings in determining the recovery path
May 2021
survey
Spillovers from 2021 US fiscal policy
The pandemic and inflation: technical factors driving volatility
The incorporation of the Recovery and Resilience Facility in the forecast
An update on the tourism sector: insights from big data
February 2021
The Trade and Cooperation Agreement between the EU and the UK and model
simulation of the short-term economic impact of the included Free Trade Agreement
The road out of the crisis: an update of alternative scenarios
The road out of the crisis remains bumpy and uncertain
November 2020
Macroeconomic effects of Next Generation EU
Previous European Economic Forecasts
193
Tourism in pandemic times: an analysis using real-time big data
Technical specifications underpinning the QUEST simulations of NGEU
Some technical elements behind the forecast
Technical assumption on the future trading relations between the EU and the UK and
model simulation of their economic impact
The inclusion of Next Generation EU and its Recovery and Resilience Facility in the
forecast
The impact and recovery from COVID-19: a model-based scenario analysis
July 2020
How the pandemic shaped the forecast
May 2020
Global value chains and protectionism
November 2019
What is behind the slowdown? A model-based analysis of growth drivers
The procyclicality of potential output
Looking at euro area GDP growth in 2019 through the lens of an estimated model
May 2019
Euro area banks 10 years after the crisis
The impact of European Structural and Investment Funds on near-term forecasting
Changes to HICP methodology
How resilient is the economy to oil price shocks?
November 2018
Implications of higher yields for the banking sector and private sector funding in the
euro area
Euro area GDP growth drivers in 2019 analysis using a structural model
Labour market slack in the euro area
May 2018
Residential construction
Drivers of the euro area recovery - evidence from an estimated model
Main drivers of growth in 2018 - shock decomposition from an estimated model
November 2017
What drives wage developments?
Automatic stabilisers in the euro area: a model-based assessment
The economic impact of uncertainty assessed with a BVAR model
May 2017
US macroeconomic policies and spillovers to the euro area
Main drivers of growth in 2017 - shock decomposition from an estimated model
Inflation: between temporary effects and slow trends
European Economic Forecast, Spring 2023
194
rebalancing growth
February 2017
growth
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following address:
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&field_core_date_published_value[value][year]=All&field_core_tags_tid_i18n=22621.
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