In the interim economic forecast published on the European Commission website on Thursday says the EU economy will grow by 2.7% in 2022 and 1.5% in 2023 Growth in the euro area is expected at 2.6% in 2022, slowing to 1.4% in 2023
It is also noted that the peak of the historical maximum of average annual inflation in Europe will be reached in 2022, at the level of 7.6% in the euro area and 8.3% in the EU, and then will decrease in 2023 to 4.0% and 4 .6% respectively.
“The EU economy remains particularly vulnerable to changes in energy markets due to its high dependence on Russian fossil fuels, and the weakening of global growth reduces external demand,” the comments to the forecast say.
The inflation forecast has been revised significantly upward compared to the Spring forecast. In addition to the strong rise in prices in the second quarter, a further rise in European gas prices should also be reflected in consumers through electricity prices. Inflation is projected to peak at 8.4% yoy in the third quarter of 2022 in the euro area before declining steadily to fall below 3% in the last quarter of 2023 in both the euro area and the EU.
Quarterly growth is expected to gain momentum in 2023, driven by a robust labor market, inflation containment, support from the Recovery and Resilience Fund, and still large excess savings.
In general, the EU economy will continue to grow, but at a much slower pace than expected in the forecast for spring 2022.