EC Lowers GDP And Inflation Forecasts For 2022
GDP in the EU and the eurozone will grow by 2.7% in 2022, the European Commission said in its spring report. In winter, the EC expected the EU and eurozone economies to grow by 4%.
GDP growth in 2023 is also downgraded to 2.3% against 2.8% in the EU and 2.7% in the eurozone, which the EC hoped for in winter. The European Commission expects global growth at 3.2% and 3.5% in 2022 and 2023 respectively, compared to the 4.2% and 3.8% in the winter forecast.
Energy prices were a major blow to the global and EU economies, the Commission explained. In addition, supply chain disruptions caused by the conflict in Ukraine and COVID-19 containment measures in some parts of China are adding to the problems and affecting production.
The European Commission also worsened its inflation forecast: it now expects prices in the eurozone to rise by 6.1% this year instead of the 3.5% it had forecast in winter. Next year, inflation will slow to 2.7%, the EC says. Price growth is expected to peak at 6.9% in the second quarter before gradually declining thereafter. In the EU, inflation will reach 6.8% in 2022 and slow to 3.2% in 2023, says the EC.