Economic recovery in Europe put an end to high energy costs

Economic recovery in Europe put an end to high energy costs

The European Commission has downgraded its economic outlook for next year, warning that shocking energy prices will impact electricity bills and affect the purchasing power and investment of citizens.

“The point of view is very positive but the level of uncertainty is quite high,” said European Commissioner for the Economy Paolo Gentiloni at a press conference, quoted on Friday (12/11)

The commission’s fall forecast raised its growth outlook for the year to 5% from 4.8% forecast for the summer, while its growth forecast for 2022 fell to 4.3% from 4 , 5%. For 2023, it is estimated to be around 2.4%.

Gentiloni said that at nearly 14% on an annual basis, the GDP growth rate in the EU in the second quarter of 2021 was a record high and as high as the unprecedented decline in GDP during the same period. last year, during the first wave of the pandemic.

Domestic demand is expected to continue to drive expansion, but growth momentum faces “new hurdles” – bottlenecks and disruptions in global supply, especially of raw materials that weigh on manufacturing in the UK. the European Union.

In addition, rising inflation, driven in large part by soaring energy prices, particularly natural gas, has “risen at a chaotic pace” over the past month. This, coupled with the growing number of COVID-19 infections, “will weigh on consumption and investment.”

Despite the more negative-than-expected outlook for the European Union, the Commission has raised its growth forecast for this year for the euro area to 19 countries, saying the economy is recovering from the worst of the coronavirus pandemic as people were going back to work.

“The European economy is moving from recovery to expansion but is now facing headwinds,” Gentiloni said in a statement. “We must remain vigilant and act as necessary so that these obstacles do not derail the recovery,” he added.

On employment, the Commission said it plans to surpass pre-crisis levels next year and expand in 2023. Unemployment in the European Union is expected to fall by 7 , 1% this year at 6.7% and 6.5% in 2022 and 2023. In the euro zone, it is projected at 7.9%, 7.5% and 7.3% over three years. (Ant / OL-13)

Read also: OPEC: high prices slow recovery after Covid-19


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