“After a strong first half of the year, the EU economy has now entered a much more difficult phase.” The European Commission announced on Friday that the euro zone should enter a recession at the end of the year due to high energy prices, linked to the war in Ukraine, which are eroding the purchasing power of households.
“The EU, the euro zone and most member countries are expected to enter a recession in the last quarter of this year,” the Brussels executive predicts in a press release. Even if he anticipates a return to growth in the spring, he has revised down his forecast for 2023 to 0.3% for countries sharing the single currency, from 1.4% expected so far.
Inflation expected at 6.1% in 2023
The European Commission has also strongly revised its inflation forecast for the euro zone for 2023 to 6.1%, compared to only 4% expected so far, but estimates that the price increase will peak at the end of this year 2022 before going back.
For the year 2022, Brussels also expects higher-than-expected inflation of 8.5%, compared to 7.6% previously forecast, due in particular to the increase in energy prices linked to the war in Ukraine. However, inflation is expected to ease in 2023, after peaking in late 2022.
Source: BFM TV
