Dow Jones Newswires: EU hikes inflation forecast and cuts growth forecast

by | Jul 14, 2022 | Stock Market

The European Commission has raised its inflation forecasts for the eurozone considerably and has slashed its 2023 growth forecast for the bloc as Russia’s war against Ukraine takes its toll on the economy. Following the revision, the European Commission expects eurozone inflation at 7.6% in 2022, up from its previous forecast of 6.1% published in May. Annual average inflation is projected to peak at historical highs in 2022, according to the Commission’s forecasts. For 2023, eurozone inflation is forecast at 4.0%, up from 2.7% in the Spring forecasts.

“Moscow’s actions are disrupting energy and grain supplies, pushing up prices and weakening confidence,” European Commissioner for Economy Paolo Gentiloni said. Russia’s invasion of Ukraine has put additional upward pressures on energy and food prices, which are feeding into global inflationary pressures, eroding the purchasing power of households and triggering a faster monetary policy response than previously assumed, the European Commission said. “In view of high inflation and tightening financing conditions, it will be important to find the right balance between moving towards a more prudent fiscal stance and protecting the most vulnerable,” EU Executive Vice-President Valdis Dombrovskis said. The eurozone economy remains particularly vulnerable to …

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