The European Commission will release its summer economic forecasts on Thursday, anticipating a further slowdown in the economy this year and in 2023 and record inflation, due to the economic impacts of the Ukraine war and energy crisis.
The macroeconomic forecasts updated by Brussels then outline a scenario of economic slowdown and high inflationHowever, a recession is not expected, at a time when almost five months have passed since the Russian invasion of Ukraine and when prices reach maximum levels, especially “pulled” by the energy sector.
On Monday, the European Commission warned that this update of macroeconomic estimates will include a downward revision of economic growth in the eurozone and the EU this year and “further” in 2023, while inflation will be revised upwards.
We will present our economic forecasts […] this week and what we see is that economic growth is resisting this year, but a downward revision is to be expected this year and more so next year because there are many uncertainties and risks”, declared the Executive Vice President of the European Commission with the portfolio “An economy that works for people”.
Speaking at the entrance to a meeting of finance ministers of the euro zone (Eurogroup), Valdis Dombrovskis indicated that, “unfortunately, inflation continues to surprise negatively and, therefore, it will be revised upwards again.”
Also speaking to the press that day, the European Commissioner for Economy, Paolo Gentiloni, indicated that, “for the moment, a reduction and limited growth are expected”, although “negative territory” is not expected, that is, recession.
In its spring forecasts, published in mid-May, Brussels had already sharply lowered its forecasts for economic growth in Europe, estimating GDP rises 2.7% this yearboth in the EU and in the euro zone, when in winter it projected increases of 4% in both cases.
At the time, the community executive also projected a “considerable revision” of the inflation rate in the euro zone this year, up to 6.1%, mainly driven by energy and food priceswith a peak in the second quarter and a decline in 2023.
Regarding Portugal, in the spring forecast, the European Commission revised Portuguese economic growth this year by 0.3 percentage points, to 5.8%, despite external challenges.
Even so, the Government’s expectation is that there will now be a slight upward revision of the Portuguese Gross Domestic Product (GDP), that is, after the Bank of Portugal has improved, in mid-June, the growth projections in 2022 at 6.3%.
Last Tuesday, the Minister of Finance, Fernando Medina, assured that he trusts that the European Commission will revise upwards, in the economic forecasts, the growth of the Portuguese GDP in 2022, despite the slowdown at the European level.
Source: Observadora
