The war in Ukraine weighs down the European economy, which will grow less than expected in the spring forecasts
The Russian invasion of Ukraine casts a shadow over the economic prospects of the European Union. The summer report prepared by Brussels draws a reality much worse than in spring, with lower growth and skyrocketing inflation. According to the projections of the European Commission, the Eurozone will suffer a “significant” contraction and will grow by 2.6% this year and 1.4% in 2023. The Spanish economy will maintain its momentum this year, but its growth will be greatly reduced measure the one to come.
This represents a downward revision of the spring economic forecasts, which calculated that GDP would grow by 2.7% in 2022 and 2.3% next year. Inflation, on the other hand, will shoot up to 7.3%, an all-time high.
Brussels assures that “many of the risks” observed in the spring forecasts have materialized, with the increase in food and energy prices, which has added more pressure to inflation. The European economy is “especially vulnerable” to the volatility of the cost of energy, due to its high dependence on Russia, which has weighed down activity. Brussels projections suggest that we will have to wait until 2023 for the economy to regain momentum and inflation to moderate to 4%.
As for Spain, the European Commission calculates a growth rate of 4% this year and 2.1% next year, being one of the European economies that will grow the most in 2022, but with a large cut in forecasts for 2023.
The Commissioner for Economic Affairs, Paolo Gentiloni, has assured that “the reopening of the economy after the pandemic will maintain economic activity this year, but it will be much lower in 2023”, due to the Russian invasion in Ukraine. In these difficult times, “Europe must show leadership, with solidarity, sustainable and safe policies”, he added.
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