The EU Commission has revised its growth forecast downwards.
(Photo: dpa)
Brussels/Berlin According to the EU Commission, the energy crisis, aggravated by the war in Ukraine, is clouding growth prospects in the euro area and driving up inflation further. In its summer forecast presented on Thursday, the Brussels authorities only expect growth in gross domestic product (GDP) of 2.6 percent for this year. In the spring she had estimated 2.7 percent. In 2023, there should only be an increase of 1.4 percent instead of the previously expected 2.3 percent.
At the same time, the Commission is now anticipating an inflation rate of 7.6 percent for this year (previously 6.1 percent). EU Economic and Monetary Affairs Commissioner Paolo Gentiloni sees the consequences of the war in Ukraine as a driver of development: “Russia’s baseless invasion of Ukraine is continuing to send shock waves through the global economy.” This would disrupt the energy and grain supply. As a result, prices rose and confidence suffered, the Italian emphasized.
In Europe, the ramp-up of the economy after the coronavirus pandemic boosted growth. But despite a promising start to the holiday season in summer, economic activity is only expected to be subdued in the second half of the year.
>>Read here: Economists predict: Price rally will continue for years
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At the same time, record inflation is expected to peak this year and gradually ease in 2023. According to the EU Commission, the European Central Bank (ECB) is also expected to clearly miss its target of 2.0 percent in 2023 with an expected inflation rate of 4.0 percent (spring forecast: 2.7 percent).
For Germany, the EU Commission expects an inflation rate of 7.9 percent in 2022 and 4.8 percent in 2023. At the same time, she lowered her forecast for economic growth for this year to 1.4 from 1.6 percent. For 2023, she expects an increase in Germany of 1.3 (spring forecast 2.4) percent.
More: “Breathing” thanks to the nine-euro ticket: Inflation in Germany is surprisingly falling