The European Commission released its 2023 Spring Economic Outlook report on the 15th, stating that due to the impact of lower energy prices, improved supply bottlenecks, and strong labor market performance, the commission has decided to raise its economic growth expectations for the EU and Eurozone for this year and the next two years. The report predicts that the EU economy will grow by 1.0% and 1.7% respectively in 2023 and 2024, which is better than the 0.8% and 1.6% predicted in the February winter outlook report. At the same time, the eurozone economy will grow by 1.1% and 1.6% respectively in this year and the next two years. The report also predicts that the EU inflation rate will reach 6.7% in 2023 and decrease to 3.1% in 2024. The inflation rate in the eurozone will reach 5.8% and 2.8% this year and next. The report points out that with the decrease in energy prices, the overall inflation situation in the eurozone improved in the first quarter of 2023, but core inflation remains sticky. In March of this year, the core inflation rate in the eurozone reached a historic high, but it is expected to gradually decrease as wage pressures ease and financing conditions tighten. European Commission member in charge of economic affairs, Gentiloni, stated at a press conference that tightening financing conditions will have a negative impact on economic activity. Borrowing costs have risen, and credit flows to businesses and households have slowed. Especially after the banking crises in the United States and Switzerland, it may lead to a tightening of loan standards. Meanwhile, higher interest rates have also led to a decrease in loan demand. Gentiloni said that the EU's economic outlook is better than expected, but there is an increase in downside risks. Once a higher than expected core inflation rate occurs, it will lead to a stronger monetary policy response and have a broad macroeconomic impact on investment and consumption. In addition, the risks associated with the external environment of the European Union remain high. The new uncertainties that have emerged after the banking industry turmoil, or those related to geopolitical tensions, have exacerbated long-term concerns about the impact of rising interest rates on fragile emerging markets. (New News Agency)