The European Commission (EC) has downgraded its forecast for the European Union’s economic growth in 2024 to 0.9% from the previously expected 1%. The forecast for the eurozone’s GDP growth this year remains at 0.8%. In 2025, the European Commission expects the eurozone’s GDP to grow by 1.3% and the EU’s by 1.5%. The May forecast envisaged a rise of 1.4% and 1.6%, respectively. In 2026, the eurozone’s economic growth rate will accelerate to 1.6%, and the EU’s – to 1.8%, the regulator predicts.
“After a long and widespread stagnation, the EU economy returned to growth in the first quarter of this year. As expected in the spring, moderate but steady growth rates continued in the second and third quarters amid further easing inflationary pressures. The prevailing conditions point to a moderate acceleration in domestic demand, despite heightened uncertainty,” the press release said.
According to the EC’s forecast, inflation (HICP index) in the euro area will slow to 2.4% this year from 5.4% in 2023 and weaken to 2.1% in 2025. In May, inflation rates were forecast at 2.5% and 2.1%, respectively. In 2026, consumer prices are expected to grow by 1.9% in the euro area and by 2% in the EU.
“Household disposable income continued to grow at a good pace in the first half of the year, driven by increased employment and the ongoing recovery in real wages,” the report says.
At the same time, the situation with investments was disappointing, as the indicator decreased by more than 2.5% in the first half of the year. The European Commission called increased uncertainty the main negative factor for both consumer spending and business investment.
Unemployment in the eurozone is expected to reach 6.5% this year and drop to 6.3% next year, remaining at this level until 2026. In the EU, unemployment is expected to decline to 5.9% in 2025 and 2026 from 6.1% in 2024.
In 2024, the budget deficit in the EU countries may shrink to 3.1% of GDP from 3.6% of GDP a year earlier, and in the eurozone countries – to 3%. In 2025, the figures will drop to 3% and 2.9%, respectively, and in 2026 – to 2.9% and 2.8%, the EC predicts.
The ratio of total public debt to GDP in the European Union is expected to increase to 83.4% by 2026 from 82.1% in 2023.
Germany’s economy, according to the EC’s forecast, will shrink by 0.1% this year and grow by 0.7% next year. France’s GDP is expected to grow by 1.1% and 0.8%, respectively, Italy’s by 0.7% and 1%, and Spain’s by 3% and 2.3%.
“The economic outlook for the EU remains extremely uncertain, and the risks are largely shifted downward,” the European Commission said in a statement.
These risks include geopolitical risks, in particular those related to Russia’s military aggression in Ukraine and the conflict in the Middle East, as well as foreign trade risks related to possible “protectionist measures by trading partners.” The EC also points to the risks of weak labor productivity growth and the danger of large-scale natural disasters.
Russian gas producer Gazprom (GAZP.MM), opens new tab said it would send 42.4 million cubic metres of gas to Europe via Ukraine on Tuesday, the same volume as on Monday, while nominations for gas flows to Austria from Slovakia edged up.
The European energy markets have been on edge over a contractual row between Gazprom and Austria’s OMV (OMVV.VI), opens new tab, which led to the Kremlin-controlled firm halting supply to the Vienna-based company on Saturday.
The flows to OMV were stopped after it threatened to impound some of Gazprom’s gas as compensation for an arbitration it had won over the contractual dispute.
Daily flows to Europe via Ukraine have remained around normal levels, however, and gas has continued to flow into Austria.
Nominations, or requests from customers, for flows to Austria from Slovakia were up 6% on Tuesday versus Monday but remained about 12% below levels seen before Gazprom halted supply to OMV.
It was not clear who was buying gas previously intended for OMV.
Nominations to the Czech Republic from Slovakia were roughly in line with levels seen in previous days this month.
Nominations for flows into Slovakia from Ukraine were also little changed while nominations for flows leaving Slovakia were mostly stable, data from transmission system operator Eustream showed.
24% of the pig industry representatives consider joining the European Union to be positive, as it will open access to new markets with more transparent rules and conditions, according to a study conducted by the Pig Producers of Ukraine in cooperation with the Food and Agriculture Organization of the United Nations (FAO) and the European Bank for Reconstruction and Development (EBRD).
Analysts noted that such a low percentage of positive responses is due to the fact that the majority (40%) of respondents associate EU accession with the loss of their competitiveness, 26% fear tighter regulatory requirements, and 10% say the sector is technically and financially unprepared given the large amount of investment needed to improve the production system in accordance with all European requirements.
“Under such conditions, 36.2% of pork producers who took part in the survey are convinced that for a faster and easier transformation of the industry in accordance with EU requirements, preferential loans, grants, other compensations and access to financial resources are needed. Others believe it is necessary to remove the corruption/bureaucratic component in the processes of obtaining permits and certificates, the high share of the black market, overcome individual difficulties of operators, as well as economic and military challenges,” the industry association explained.
The survey involved pork producers who provide about 80% of the industrial supply on the market. Their total livestock is more than 2 million heads.
Wine production in the European Union will decline by about 3% this year due to unfavorable weather conditions and rising costs, agricultural lobbying group Copa-Cogeca predicts.
Wine production in the EU this year will amount to about 144 million hectoliters (hl), the group said in a press release.
Italy is expected to become the largest wine producer in Europe with 41 million hectoliters (up 7%), Spain will take second place (38.1 million hectoliters, up 18% year-on-year), and wine production in France will fall by 22%, which will cause the country to fall back to third place with 37.4 million hectoliters.
The outgoing year was marked by unpredictable weather and the effects of recent droughts in Europe, the report says. Meanwhile, vineyard diseases have become less of a problem than in 2023, experts say. In addition, rising prices for glass, gasoline, transportation services and fertilizers have significantly increased producers’ costs, and high interest rates have made it difficult to access the loans needed to grow the business.
“The European wine market is going through a difficult time, affected by high production costs and the situation on international markets,” said Luca Rigotti, head of the Wine Working Group at Copa-Cogeca. – “However, I am confident in the resilience and entrepreneurship of our farmers.
At the first “EU-Ukraine Investment Conference” in Warsaw on Wednesday, the European Union called for mobilizing private investment in areas critical to Ukraine’s recovery, the European Commission (EC) said.
“Under this call, EU businesses, including joint ventures or consortia involving both European and Ukrainian companies, are invited to submit proposals by March 1, 2025. Proposals will be reviewed and linked to the most suitable investment projects financed by the Investment Framework for Ukraine, which is an integral part of the EU’s EUR 50 billion Ukraine Fund,” the EC communiqué says.
“Ukraine’s recovery requires both public funding and partnerships with the private sector. By combining these efforts, we can maximize investment, support the country’s recovery and its gradual integration into the EU single market. Indeed, facilitating private sector participation in Ukraine’s recovery and reconstruction will be key to its success,” said Oliver Vargey, European Commissioner for Neighborhood and Enlargement Policy.
The European Commission named the priority areas of the EU’s call: development of sustainable energy solutions, including renewable energy projects and modernization of existing energy infrastructure; investment in processing of critical raw materials – key minerals and resources needed for high-tech industries and renewable energy technologies; revitalization and modernization of the manufacturing and production sector to increase industrial competitiveness; support for construction and reconstruction of Ukraine; and support for the development of the energy sector.
The two-day conference, according to the EC, brought together more than 5,000 participants, including companies, banks and investors from Ukraine, the EU and other countries, to mobilize private investment in the recovery, reconstruction and modernization of Ukraine.
In 2023, Ukraine exported 45.8 thousand tons of honey to the European Union, with 28% of imports of this product from Ukraine, said Olena Dadus, Deputy Director of the Agrarian Development Department of the Ministry of Agrarian Policy and Food.
“The markets of the European Union are key for honey exports, as Ukraine is the second largest exporter of honey to the EU, accounting for 28% of all imports of this product by the bloc. According to the Register of Export Capacities, about 72 Ukrainian enterprises are engaged in the supply of honey abroad,” the press service of the Ministry of Agrarian Policy and Food quoted her as saying at the Honey Forum ”European Integration of the Ukrainian Honey Industry: Challenges and Opportunities.”
According to the State Customs Service and the State Statistics Committee, honey exports in 2023 amounted to 55.4 thousand tons worth $121.4 million, including 45.8 thousand tons (93.6% of total exports) worth $94.9 million. At the same time, in the first half of 2024, honey exports to the EU amounted to 40.6 thousand tons worth $70.7 million.
The Ministry of Agrarian Policy recalled that the main countries of honey export in 2023 were the European Union (Germany, Poland, Spain, France, Belgium, Romania, Italy, Hungary, Greece) and the United States.
As reported, as part of Ukraine’s association with the European Union, Ukrainian companies were entitled to supply 18.507 thousand tons of honey to the EU market free of duty starting June 5, 2024. After this volume was exhausted, the EU resumed quotas on August 21. From January 1, 2025, and until June 5, 2025, a new tariff quota will be introduced, which corresponds to 5/12 of the threshold set for the emergency braking.
