Weakened growth. Galloping inflation. The European Commission has published its summer economic forecasts. The war in Ukraine and the rise in energy prices never cease to weaken the European economy.
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More inflation. Less growth. The summer economic forecasts of the European Commission, published Thursday, July 14, were further darkened under the incessant increase in energy prices and foodstuffs, which are engaging in purchasing power and confidence; Disturbances of the supply chains, due in particular to the drastic confinements practiced in China; increase in interest rates and the fall in American economic performance.
As planned during the presentation of spring forecasts, on May 19, the growth of gross domestic product (GDP) within the European Union should reach 2.7 % this year. This apparent performance is due to the good dynamics of the first quarter and the aftermath of the strong growth of the year 2021. In reality, economic growth will be sluggish in the coming months, despite the depreciation effects of a tourist season which ‘Successful announcement.
It was in 2023 that the economic situation of European countries should suffer from the war in Ukraine and its consequences. While the Commission was counted two months ago on economic growth of 2.3 % for the entire European Union, it now estimates that the 27 will painfully reach 1.5 % increase in GDP in 2023. The French economy should grow by 1.4 % against 1.3 % in Germany.
“Strong uncertainties”
As for inflation, it should further progress to reach unprecedented summits in the history of monetary union, with 8.4 % planned in the euro zone in the third quarter and an annual average of 7.6 % In 2022, against the 6.1 % which were still scheduled in May. A slow decrease is hoped for the following year with probably an inflation rate of 4 % in 2023. “All the risks we had identified in May were materialized at various degrees”, commented Paolo Gentiloni, commissioner ‘economy.
The extremely unstable nature of the global economy still makes a little more complex exercise the forecast exercise to which the European executive devotes which, through the voice of Paolo Gentiloni recognizes that “these forecasts are subject to strong uncertainties and Alleas lowering “. As proof, the figures published today correct the shot of the previous forecasts, already unusual, which dated May 19. It is even a recession that threatens the European Union in the event of a more radical interruption of gas flows from Russia. “A storm is possible,” warns the European Commissioner while the price of gas reached, on July 12, the 173 euros per kilowatt hour against 40 euros a year earlier.
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