Paolo Gentiloni, Commissioner for Economic Affairs, said this in the framework of the meeting of eurozone economy and finance ministers on Monday. The European economy is sailing in troubled waters. Russia’s war in Ukrainetriggered, inflation and created a state of complete uncertainty. A scenario that forces the European Commission to once again revise its summer growth forecasts downwards.
According to the new chart, Eurozone economy to grow by 2.6% in 2022, one-tenth less than the forecast just two months ago, to 1.4% in 2023, almost one point less than the forecast. The biggest problem will remain inflation: it will hit a record 7.6% this year, one and a half points above expectations, but will drop to 4% next year.
undistorted prediction
numbers for the whole European Union they are very similarRunaway inflation, with growth of 2.7% in 2022 and 1.5% in 2023, and reaching 8.3% this year, will moderate to 4.6% next year. In the case of SpainCommunity Executive did not break its growth forecast for this year. While Gross Domestic Product will fall to 2.1% in 2023, well below the 3.4% they had forecast just two months ago, the economy will increase by 4% in May as they forecast. As for inflation, Brussels projections point to 8.1% this year, above the Eurozone average, but will moderate to 3.4% in 2023.
According to Brussels, the figures reflect most of the downside risks surrounding spring forecasts have come true. Russian invasion of Ukraine rapid rise in food prices and Energy fueling inflationary pressures globally, eroding household purchasing power and triggering a faster-than-expected monetary policy response. In addition, the European economy remains particularly vulnerable to developments in energy markets. great addiction fossil fuels Russians The weakening of global growth weakens foreign demand.
Promising tourist season
this A good start to the year and “promising tourist season” will help support growth rate It’s the annual rate this year, but the Community Manager is aware that activity will moderate for the rest of the year and expansion will be much slower. It caused Brussels to review the pressure significantly upwards. Thus, in addition to the strong increase in prices in the second quarter, new price increase gas in Europe It is reflected to the consumers through electricity prices.
In particular, Brussels predicts that inflation in the euro area will reach a maximum of 8.4% on an annual basis in the third quarter of 2022, and from there it will decline steadily to below 3% in the last quarter of 2023. in the eurozone and the EU, provided that pressures from supply constraints and raw material prices are no longer available. However, the European Commission has will largely depend on the development of the war and what happens to the gas supply.
gas increase
“Further increases in gas prices could push inflation further and slow growth. Conversely, runoff effects can increase inflationary forces and sharper tightening of financial conditions Stating that this will not only weigh on growth, but also bring greater risks to financial stability, they ensure that in the new balance, they do not exclude the possibility that a recovery in covid cases will cause new disturbances in the economy.
On the positive side, forecasts emphasize that the downward trend in oil and other commodity prices may intensify, leading to a faster-than-expected decline in inflation. Also, thanks to the strength of the labor market, private consumption can better resist rising prices if households use more of their accumulated savings.
Source: Informacion
Calvin Turley is an author at “Social Bites”. He is a trendsetter who writes about the latest fashion and entertainment news. With a keen eye for style and a deep understanding of the entertainment industry, Calvin provides engaging and informative articles that keep his readers up-to-date on the latest fashion trends and entertainment happenings.