european union

The eurozone is set to enter a recession over the winter as high energy prices dampen industrial activity and cut into consumers’ spending appetites, the European Commission has warned.

The price shocks unleashed by the COVID-19 pandemic and Russia’s invasion of Ukraine have also left deep impacts on the USA and the UK, as well as on the rest of the world.

In a release on Friday, the Commission said increased uncertainty and costs “are expected to tip” the eurozone and most of the European Union into recession in the last quarter of 2022.

“The contraction of economic activity is set to continue in the first quarter of 2023. Growth is expected to return to Europe in spring,” it continued.

“With powerful headwinds still holding back demand, economic activity is set to be subdued, with GDP growth reaching 0.3 percent in 2023.”

The forecast was issued at the same time as a sharp increase in the Commission’s inflation predictions, with eurozone inflation expected to stand at 8.5 per cent for 2022, a point higher than previously expected, and 6.1 percent in 2023, two points higher than earlier predictions.

“Inflation has continued to rise faster than expected, but we believe that the peak is near. Most likely at the end of this year,” Commissioner for Economy Paolo Gentiloni said.

Related

‘Product Malta under severe strain,’ warns the Malta Hotels and Restaurants Association

July 20, 2024
by BN Writer

This week, the sea at Balluta Bay, St Julian’s turned green and several areas experienced repeated power cuts

Public consultation on the draft law that regulates cooperatives

July 20, 2024
by BN Writer

Cooperatives are defined as people-centred enterprises that are owned, controlled and run by and for their members

Maltese non-financial businesses generated €6.5 billion profit in 2022 – NSO

July 19, 2024
by Robert Fenech

The gambling sector emerges as a big loser with its profits shrinking by over 25%