The EU Commission expects continued inflation and lower economic growth in the euro zone. Economic Commissioner Paolo Gentiloni says: “We are driving through stormy waters.”
The Ukraine war is likely to have a more massive impact on the economy and consumers in Europe than previously thought: The EU Commission said on Monday at the sidelines of a meeting of finance ministers in Brussels that it expects higher inflation and lower economic growth than just under two months ago. “We are driving through stormy waters,” emphasized Economic Commissioner Paolo Gentiloni.
The Brussels authority wants to present its updated economic forecast on Thursday, after only having to correct its figures downwards in May. Deputy Commission President Valdis Dombrovskis said that because of the “many uncertainties and risks” he expects consumer prices to rise even faster and weaker growth – especially in the coming year.
In June, inflation in the euro zone reached a new high of 8.6 percent. In its May forecast, the Commission still assumed annual inflation of 6.1 percent in the euro zone and 6.5 percent in Germany.
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Because of the ongoing energy crisis, the EU Commission is also expecting “very limited, reduced and slowed growth,” said Gentiloni. In May, the Commission predicted an average economic growth of 2.7 percent for the 19 euro countries this year.