14 February 2023

Remarks by Executive Vice-President Valdis Dombrovskis at the ECOFIN press conference

The EU economy showed remarkable strength last year. The outlook for 2023 is somewhat brighter. It has led to slight upward revisions to our growth forecasts. We project 2023 growth at 0.8% for the EU as a whole.

Let me start with the economic outlook.

There are several promising signs, but we are not out of the woods yet. We still face multiple challenges.

As you know, yesterday the European Commission updated its economic forecast, and we presented it today to ministers.

The EU economy showed remarkable strength last year.

The outlook for 2023 is somewhat brighter. It has led to slight upward revisions to our growth forecasts.

We project 2023 growth at 0.8% for the EU as a whole.

Inflation is starting to cool off after hitting record highs last autumn.

Energy prices are falling. Wholesale gas prices, for example, are now well below pre-war levels.

This reflects lower gas consumption as well as an impressive diversification of supply away from Russian pipeline gas.

We forecast a fall in inflation from 9.2% in 2022 to 6.4% this year, and 2.8% in 2024 in the EU.

This more encouraging picture reflects the resilience that we managed to build and reinforce over the last few years.

But that said, the updated outlook remains subject to great uncertainty due to Russia's continued war against Ukraine.

Across the EU, people and companies are still going through a demanding period.

So it is important that we steer through this difficult period with the right policies and in a coordinated way.

Our economies also need a credible system of economic governance in order to thrive, to:

• underpin advantageous financing conditions for companies and households, and to
• create space for the massive investments needed for the green and digital transitions and to boost our resilience.

We need credible rules that ensure public debt sustainability across the EU.

Our aim is for all Member States to have sustainable fiscal positions, using a tailor-made combination of fiscal adjustment, reforms and investments.

These are among the objectives of the Commission's orientations for reviewing the EU's system of economic governance, which ministers discussed today.

It was a substantive and constructive debate. There appears to be broad agreement on some key principles and objectives.

These include, for example:

• ensuring sustainable public finances by combining gradual fiscal adjustments with reforms and investments
• a greater medium-term focus, based on Member States' own fiscal-structural plans
• a better reflection of country-specific public finance challenges in the design of these plans
• more dynamic surveillance of macroeconomic imbalances, allowing for earlier detection of emerging imbalances.

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