EU downgrades eurozone growth forecast to 2.7%
The European Union (EU) adjusted its 2022 eurozone growth forecast to 2.7% due to the increasing gas prices brought on by the Russia-Ukraine war.
EU Executive VP Valdis Dombrovskis said that the region is “going through a challenging period” due to the ongoing war.
He added that the surging energy prices are “driving inflation to record highs and putting a strain on European businesses and households.”
The conflict also spurred the EU’s executive arm to revisit its eurozone inflation prediction for 2022, with consumer prices expected to jump by 6.1% y-o-y from an earlier 3.5% projection.
EU commissioner Paolo Gentiloni said, “Our forecast is subjected to very high uncertainty and risks.”
Gentiloni added, “Other scenarios are possible under which growth may be lower and inflation higher than we are projecting today. In any case, our economy is still far from a normal situation.”
