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European inflation forecast raised

Benchmark projected at 8.3% on average this year, according to the European Commission

Inflation will reach 7.6% in the euro zone and 8.3% in Europe as a whole this year, according to the European Commission’s revised forecast on Thursday, 1.5% higher than previous forecasts.

In May, the EU executive forecast eurozone inflation to hit 6.1% this year, before falling to 2.7% in 2023. Now both forecasts have been revised to 7.6 % and 4%, respectively.

Forecasts have also been revised upwards for Europe as a whole to 8.3% (2022) and 4.6% (2023) from 6.8% and 3.2% respectively.

“Record inflation is now expected to peak later this year and gradually decline in 2023. With the course of the war and the reliability of gas supply unknown, this forecast is subject to high uncertainty and downside risks” , EU Economics Commissioner Paolo Gentiloni said in a statement.“Moscow’s actions are disrupting energy and grain supplies, driving up prices and weakening confidence,” he added.

Gentiloni also told CNBC that in the event of a complete cut off from the Russian gas scenario, “There is indeed a risk of entering negative territory, especially in the year’s figure.”

READ MORE: EU prepares for gas cut – media

On Monday, Russian energy giant Gazprom suspended the flow of natural gas to the EU via the key Nord Stream 1 gas pipeline due to scheduled maintenance work.

This has raised fears in Europe that the suspension of deliveries could be extended beyond the 10-day deadline, derailing the region’s winter supply preparations and exacerbating the EU’s energy crisis.

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