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The effects of the war in Ukraine are already being felt in the European economy, whose growth is slowing as inflation has soared.
The main cause of this situation is energy prices. The conflict has prompted the EU Commission to drastically lower its growth forecast for the economy. According to the spring forecast, the economy of the EU and the eurozone countries is expected to grow this year by only 2.7 percent instead of the four percent previously expected. The inflation forecast for euro area countries in 2022 has almost doubled to 6.1 percent.
Brussels authorities clarified that the war in Ukraine and above all the persistently high prices of energy and other raw materials are continuing to put pressure on the economy. To these are added disruptions in supply chains. For next year the Commission assumes a 2.3 percent increase in the EU and the eurozone. In the February forecast, the commission had predicted for 2023 an increase of 2.8 percent for the EU and 2.7 percent for the eurozone countries.
The forecast for the German economy was also significantly corrected, in part due to the war in Ukraine. The EU Commission forecasts only a 1.6 per cent increase this year, up from the 3.6 per cent previously expected. Next year, Europe’s largest economy will grow by 2.4 percent instead of the 2.6 percent previously forecast.
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