The European Central Bank (ECB), against the background of the war in Ukraine and the rapid rise in energy prices, sharply adjusted its inflation forecasts in the eurozone for 2022 upwards. This year, the average inflation rate will be 5.1 percent, the regulator said on Thursday, March 10. In December alone, the ECB predicted inflation in the euro area in 2022 at 3.2 percent.
For 2023, the European Central Bank predicts inflation at 2.1 percent (still – 1.8 percent), and for 2024 -1.9 percent (against 1.8 percent). “The war between Russia and Ukraine due to the rise in prices for energy and raw materials provoked by it, disruptions in international trade and weakening of confidence will have a noticeable impact on economic activity and inflation. The scale of this negative impact will depend on the further development of the conflict,” the chairman said. ECB Christine Lagarde.
GDP Growth Forecasts
For the current year, ECB analysts predict GDP growth in the eurozone at only 3.7 percent. In December alone, growth was expected to be 4.2 percent. For 2023, the economy is projected to grow by 2.8 percent (previously 2.9) and for 2024 – 1.6 percent (the forecast has not changed).
“Economic recovery is helped by the weakening of the effects of the omicron version of the coronavirus. Supply disruptions have been decreasing recently, while the situation in the labor market continues to improve,” Lagarde said.
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