Brussels (agencies)
Yesterday, the European Union warned that the euro zone will enter a recession during the winter, while Brussels raised its inflation forecasts for 2022 and 2023 on the back of higher energy prices.
Europe is reeling from the economic shocks caused by the Ukraine crisis, which have driven up energy costs and dealt a blow to the purchasing power of consumers across the continent.
The European Commission said that the increasing uncertainty and rising costs are expected to plunge the euro area and most of the bloc into recession in the last quarter of 2022.
The Commission stressed that “the contraction in economic activity is expected to continue in the first quarter of 2023, and that growth will return to Europe during the spring.” “At a time when strong headwinds continue to limit demand, economic activity is expected to be weak, with GDP growth reaching 0.3 percent in 2023,” she added.
Brussels expected that the performance of Germany, the largest economic power in the European Union, will be the worst at the level of the bloc, as it is likely to record a contraction of 0.6 percent next year. It stated that the GDP growth rate for 2022 in the euro area as a whole was 3.2 percent, after a strong performance at the beginning of the year.
But the European Union’s economic commissioner, Paolo Gentiloni, pointed out that “the repercussions of high energy prices and hyperinflation are now beginning to appear.” “We have a few difficult months ahead,” he added, warning that “the possibility of additional economic disruptions as a result of the Russian war has not ended.”
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