EU Drastically Lowers Growth Forecast for Next Year... Economic Recession Expected This Winter

[Asia Economy Reporter Changhwan Lee] A warning has been issued that Europe will fall into an economic recession this winter due to inflation caused by the Russia-Ukraine war. The economic growth rate for next year is also expected to fall short of expectations.

The European Union (EU) Commission stated in its "2022 Autumn Economic Forecast" released on the 11th (local time) that "due to pressures from soaring energy prices, decreased household purchasing power, and a fragile external environment, the Eurozone and most member states are expected to enter an economic recession in the last quarter of this year."

The Commission predicted that the economic activity contraction will continue until the first quarter of next year.

The Commission's forecast for next year's real Gross Domestic Product (GDP) growth rate, released on the same day, was sharply revised down to 0.3% from the 1.4% forecast announced in the summer in July.

The EU Commission expects the average annual inflation rate to reach a high level of 8.5% in the Eurozone and 9.3% across the entire EU this year.

Although the average annual inflation rate for next year is expected to be somewhat lower than this year, it is still predicted to remain high compared to normal levels, at 7.0% for the EU and 6.1% for the Eurozone.