The economy of the European Union is headed for only modest growth in coming months as consumers regain some of the purchasing power they lost to inflation, the bloc's executive commission said Friday.

The European Commission on Friday predicted economic growth to pick up slightly and inflation to keep falling in the eurozone next year, while warning of growing risks linked to geopolitical tensions.

After dodging a recession and amid falling interest rates in the wake of the Covid-19 pandemic, economists believe consumer demand, wage growth and increasing investment support long-term economic growth.

The EU Commission predicted growth of 1.3% in the eurozone in 2025 while inflation is expected to fall. The German economy, the biggest in the bloc, is expected to remain sluggish.