The European Commission cut its economic forecast for 2022 to 2.7% on Monday, down from a prior estimate of 4%, due to surging energy prices and the fallout of the Ukraine war.
Russia's invasion of Ukraine is "weighing on Europe's economic recovery" from the Covid-19 pandemic, EU Economy Commissioner Paolo Gentiloni said in a statement.
Gentiloni highlighted energy price hikes and supply chain disruption as the main economic impacts of the war, but said the strong economic growth that was recorded in 2021 should cushion the worst effects. Economic growth in the European Union in 2023 is now projected at 2.3%.
Inflation in the euro area is expected to almost double to 6.1% in 2022, compared to 3.5% forecasted previously. Euro area inflation is projected to peak at 6.9% in the second quarter of 2022, before gradually falling to 2.7% in 2023.
