Photo by Asia Economy DB
The European Union (EU) executive body, the European Commission, on the 14th (local time) once again downgraded its economic growth forecast for the Eurozone this year.
In the '2022 Summer (Interim) Economic Forecast' released that day, the EU Commission projected that the Eurozone's real Gross Domestic Product (GDP) will increase by 2.6% this year and 1.4% next year compared to the previous year. The Eurozone refers to the 19 member countries within the EU that use the euro as their currency.
This is a downward revision compared to the '2022 Spring Economic Forecast' announced in May. In the spring forecast, the EU Commission expected the real GDP of both the entire EU and the Eurozone to grow by 2.7% this year and 2.3% next year compared to the previous year. In this summer economic forecast, the total GDP of the EU is projected to increase by 2.7% this year and 1.5% next year.
The EU Commission had already downgraded the economic growth forecasts for this year and next in the spring economic forecast compared to the '2022 Winter (Interim) Economic Forecast' announced in February before Russia's invasion of Ukraine.
In this summer economic forecast, by member country, GDP is expected to increase by 1.4% in Germany, 2.4% in France, and 2.9% in Italy this year.
The EU Commission diagnosed that Russia's invasion of Ukraine has added further upward pressure on energy and food prices, fueling global inflation and weakening consumer purchasing power. It added that this has triggered a faster-than-expected monetary policy response.
The EU Commission also cited the ongoing slowdown in U.S. growth and China's strict zero-COVID-19 policy as additional negative factors.
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