Forecasts of recessions over winter as inflation increases
The European Union Commission has forecasted that the 19 countries that use the currency Euro will fall into a recession over the winter due to an increase in inflation. These forecasts which were released on Friday, November 11, predicts that decrease in the economic output during the last three months of 2022, leading up to the first months of 2023.
“The EU economy is at a turning point,” said Paolo Gentiloni, European commissioner for economy in a report by the Associated Press. He added that, “The outlook for next year has weakened significantly. After a surprisingly strong first half of the year, the EU economy lost momentum in the third quarter and recent survey data point to a contraction for the winter,” he stated in a report published in the Associated Press. “The outlook for next year has weakened significantly.”
According to the report, factors such as high energy prices, rising living costs, increased interest rates, and decreasing global commerce, are anticipated to drive the EU and most member countries into recession in the fourth quarter.”
The growth forecast for 2023, the report states, was also lowered from 1.4% to 0.3%. The worst performer next year is likely to be Germany, the report said, which is Europe’s largest economy and one of the most dependent on Russian natural gas before the war in Ukraine.
According to the EU prediction, inflation will peak later than predicted, near the end of the year, and raise the average rate to 8.5% in 2022 and 6.1% in 2023 in the eurozone.
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