European Economic Forecast. Spring 2022

Summary:

The European Commission published on 16 May 2022 its Spring economic forecast for the European Union (EU) and the Eurozone.

Further information:

The Spring 2022 Economic Forecast revises the European Union's growth outlook downwards and the forecast for inflation upwards on the back of the impact of Russia’s invasion of Ukraine on the European economy.

The outlook for the EU economy before the outbreak of the war was for a prolonged and robust expansion. But Russia’s invasion of Ukraine introduced new challenges, just as the EU had recovered from the economic impacts of the COVID-19 (coronavirus) pandemic. By exerting further upward pressures on commodity prices, causing renewed supply disruptions and increasing uncertainty, the war exacerbates pre-existing headwinds to growth, which were previously expected to subside. This has led the European Commission to revise the EU’s growth outlook downwards, and the forecast for inflation upwards.

Real GDP growth in both the EU and the Euro Area was expected at 2.7% in 2022 and 2.3% in 2023, down from 4.0% and 2.8% (2.7% in the euro area), respectively, in the previous forecast.

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Commentary and Analysis

Emerging Europe: News & Analysis, 16/05/2022: Russia’s invasion of Ukraine is a test for the EU’s economic resilience https://emerging-europe.com/news/russias-invasion-of-ukraine-is-a-test-for-the-eus-economic-resilience/

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News

CityAM, 16/05/2022: Russia-Ukraine war generates new headwinds for European economy https://www.cityam.com/russia-ukraine-war-generates-new-headwinds-for-european-economy/

Bloomberg, 16/05/2022: EU Braces for Storm as Ukraine Fallout Cascades in Economy https://www.bloomberg.com/news/articles/2022-05-16/eu-braces-for-storm-as-ukraine-fallout-cascades-through-economy

Reuters, 16/05/2022: Hungary PM Orban warns of "era of recession" in Europe https://www.reuters.com/world/europe/hungary-pm-orban-warns-era-recession-europe-2022-05-16/

LSM.lv, 16/05/2022: EC cuts Latvia's GDP forecast again https://eng.lsm.lv/article/economy/economy/ec-cuts-latvias-gdp-forecast-again.a457012/

ANSA.it, 16/05/2022: EU cuts Italian growth forecast for 2022 to 2.4% https://www.ansa.it/english/news/politics/2022/05/16/eu-cuts-italian-growth-forecast-for-2022-to-2.4_774f109d-d00c-47b6-83fa-cff250b52b49.html

Euronews, 16/05/2022: EU slashes growth forecast and predicts prices will rise faster than thought this year https://www.euronews.com/my-europe/2022/05/16/eu-slashes-growth-forecast-and-predicts-prices-will-rise-faster-than-thought-this-year

The Guardian, 16/05/2022: EU growth forecast cut as war in Ukraine fuels inflation https://www.theguardian.com/world/2022/may/16/eu-growth-forecast-cut-inflation-ukraine-war-please

Reuters, 16/05/2022: Ukraine war to slash euro zone 2022 growth, boost inflation, European Commission says https://www.reuters.com/world/europe/eu-commission-cut-2022-euro-zone-growth-forecast-27-ft-2022-05-16/

Politico, 16/05/2022: Commission delivers gloomy numbers but tries to bat away stagflation fears https://www.politico.eu/article/eu-slashes-growth-boosts-inflation-forecast/

The Irish Times, 16/05/2022: EU hikes Irish inflation forecasts as it lowers European growth outlook https://www.irishtimes.com/business/economy/eu-hikes-irish-inflation-forecasts-as-it-lowers-european-growth-outlook-1.4879510

Le Monde, 16/05/2022: Higher inflation, slower growth: the European Commission announces tweaked forecasts https://www.lemonde.fr/en/economy/article/2022/05/16/higher-inflation-slower-growth-the-european-commission-announces-tweaked-forecasts_5983684_19.html

The Brussels Times, 16/05/2022: European Commission issues uncertain economic forecast for EU https://www.brusselstimes.com/eu-affairs/225345/european-commission-issues-uncertain-economic-forecast-for-the-eu

Bloomberg, 16/05/2022: Euro Area Would Barely Grow If Russian Gas Cut Off, EU Says https://www.bloomberg.com/news/articles/2022-05-16/euro-area-would-barely-grow-if-russian-gas-is-cut-off-eu-says

Kathimerini, 17/05/2022: Cyprus GDP expansion projection slashed to 2.3% https://www.ekathimerini.com/economy/1184517/cyprus-gdp-expansion-projection-slashed-to-2-3/

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Official

European Commission: Economic Forecasts: Spring 2022 Economic Forecast: Russian invasion tests EU economic resilience https://ec.europa.eu/info/business-economy-euro/economic-performance-and-forecasts/economic-forecasts/spring-2022-economic-forecast_en

European Commission: Press Release, 16/05/2022: Spring 2022 Economic Forecast: Russian invasion tests EU economic resilience https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3070

European Commission: Remarks by Commissioner Gentiloni at the Spring 2022 Economic Forecast press conference (16 May 2022) https://ec.europa.eu/commission/presscorner/detail/en/speech_22_3107

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