The European Commission has predicted that the inflation rate in the Eurozone will decline faster than previously expected this year, as the impact of disruptions in maritime trade in the Red Sea appears to be milder than anticipated. The Commission indicated that inflation is expected to slow to 2.5% this year, down from the 2.7% projected in February, and it forecasts that the Eurozone will grow by 0.8% in 2024. However, European Union Economic Commissioner Paolo Gentiloni stated that "predictions remain uncertain amidst two raging wars" in Ukraine and Gaza.
This comes amid a sharper than expected slowdown in consumer prices thanks to favorable figures recorded at the beginning of the year. These prices are approaching the 2% target set by the European Central Bank, which should reassure the monetary institution regarding its plan to lower interest rates in June. The Commission noted that "inflation is expected to continue decreasing and reach its target slightly earlier in 2025" than previously stated in forecasts published on February 15. For the upcoming year, Brussels is counting on a 2.1% increase in prices in the twenty countries sharing the single currency, compared to 2.2% previously.
