Brussels (AFP) – The European Commission announced on Monday it cut its forecast for economic growth for the euro zone in 2022 by 1.3 points to 2.7%, and increased its forecast for inflation by 3.5 points to 6.1%, due to the war in Ukraine. “There is no doubt that the EU economy is going through a difficult period due to the Russian war against Ukraine, and we have revised our forecasts downward accordingly,” Commission Vice President Valdis Dombrovskis said in a statement. The most important negative factor is high energy prices, which are driving inflation to record levels and weighing on European companies and households.” Economic Commissioner Paolo Gentiloni warned that these expectations are accompanied by a “high level of uncertainty” linked to the development of the conflict and the situation could worsen further. He explained that “other scenarios are possible, such as recording weaker growth and higher inflation than we expect today.” Similarly, the growth forecast for this year for the European Union as a whole has been lowered to 2.7%, and inflation is expected to be higher than in the 19 countries that share the single currency, and to reach 6.8%. Brussels expects GDP growth of 2.3% in 2023 in both the eurozone and the European Union, and estimates that inflation will fall next year to 2.7% and 3.2%, respectively. The war in Ukraine exacerbated the difficult conditions that prevailed before the start of the conflict, and were expected to disappear during the year, especially the increase in the prices of energy resources, which was particularly reflected in the price of electricity, fuel, food, and some industrial products and services. The economy has been on a choppy path over the past two years. After being affected by the repercussions of the Covid pandemic in 2020, activity rebounded strongly from the spring of 2021, with the result being a record growth of 5.4% recorded last year in the Eurozone after a record recession that saw GDP fall by 6.4% the year before. The growth recorded in 2021 contributed to improving the performance of 2022. Without it, growth would not have exceeded 0.8% this year, as Gentiloni emphasized.
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