The European Commission expects the EU and Eurozone economies to enter recession in the last quarter of this year due to inflation.
The European Commission cut its forecast for economic growth next year, saying the 19 countries that use the euro currency will slide into recession over the winter, with peak inflation lasting longer than expected, fuel prices rising and heating costs eroding consumer purchasing power.
The autumn forecast, released on Friday by the European Commission, predicted a decline in production in the last three months of this year and the first months of 2023.
She says that high energy prices, rising costs of living, high interest rates and general uncertainty “are expected to lead to a recession in the European Union, the eurozone and most member countries in the last quarter of this year.”
The growth forecast for all of 2023 has been cut to 0.3% from the 1.4% forecast in the previous forecast last July.
The European Commission has also significantly increased inflation expectations in the European Union for this year and next, from 8.3% to 9.3% in 2022 and from 4.6% to 7% in 2023.
The European Commission also lowered the economic forecast for oil prices for 2022 to $101.8 per barrel from the previous forecast of $108.2 per barrel.
The Commission expects oil prices to fall to $85 per barrel in 2023 and to $79 per barrel in 2024.
– International economy:
The European Commission cut its global GDP growth forecast for 2022 to 3.1% from the previous forecast of 3.2%.
The growth forecast for 2023 has also been cut to 2.5%, after last spring’s previous forecast of 3.5%.
The European Commission has upped its forecast for Russia’s gross domestic product, which is expected to decline by 5.1% in 2022, after forecasting it to fall by 10.4% earlier this year.
However, he lowered his forecast for Russia’s economic performance for the next 2023, as he expects a decline of 2.3% instead of the previous forecast of a decline of 1.5%.
The European Commission lowered its forecast for China’s GDP growth for 2022 to 3.4% after previously expecting the Chinese economy to grow by 4.6%. For 2023, the forecast is reduced from 5% to 4.5%.
The European Commission also sharply cut its forecast for US economic growth in 2023 to 0.7% from a forecast of 2.3% last spring. In 2024, the Commission expects the US economy to grow by 1.7%.
Source: Prime + AB