The euro area economy is projected to recover slowly this year but inflation is expected to decelerate notably on falling energy prices, the European Commission said in its Winter interim forecast, released Thursday.

The single currency bloc is forecast to expand only 0.8 percent this year, which was down from the Autumn forecast of 1.2 percent.

The growth projection for 2025 was trimmed to 1.5 percent from 1.6 percent.

The EU said the region entered 2024 on a weaker footing. Prospects for the first quarter remain subdued although the economy narrowly escaped recession in the second half of 2023.

However, the conditions for a gradual acceleration of economic activity this year appear to be still in place, the EU said.

The inflation projection for 2024 was lowered to 2.7 percent from 3.2 percent. Meanwhile, the forecast for next year was retained at 2.2 percent.

Germany's real GDP is forecast to expand 0.3 percent in 2024, down from the previous forecast of 0.8 percent. The estimate for 2025 was retained at 1.2 percent. In 2024, France GDP is expected to grow moderately, by 0.9 percent annually, which implies a downward revision of 0.3 percentage points.

GDP growth is forecast at 1.3 percent in 2025, marginally below the autumn forecast of 1.4 percent.

Spain's real growth is forecast to moderate to 1.7 percent in 2024, unchanged from autumn, owing to the combination of several factors. Growth is expected to accelerate again next year, to an unrevised 2.0 percent, on the back of reinvigorated investment growth and the projected positive contribution from external demand.

Italy's GDP is forecast to expand 0.7 percent in 2024 underpinned by investment and household spending. However, the outlook was weaker than the previously projected 0.9 percent.

Next year, real GDP is forecast to expand 1.2 percent in 2025, unchanged compared to autumn.

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