The European Commission is once again reducing its forecasts

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The European Commission will once again reduce its growth forecasts in Europe for this year and next, but at the same time increase its inflation forecasts to take into account the consequences of the war in Ukraine, European Commission Vice President Valdis warned on Monday Dombrovskis, reports the AFP agency, quoted by ziare.com.

The EU executive is due to announce its new revised forecasts on Thursday.

“Economic growth is proving to be resilient this year. Despite this, we can expect a downward revision, and a more important one for next year, “said Valdis Dombrovskis, ahead of a meeting of eurozone finance ministers. “And, unfortunately, inflation continues to be higher than forecast. As a result, inflation forecasts will again be revised upwards, “Dombrovskis added.

According to the latest Eurostat data, the annual inflation rate in the euro area reached a new record of 8.6% in June.

The war in Ukraine has already forced the European Commission to drastically revise its growth forecasts, especially as a result of the explosion in energy prices.

In May, the EU executive revised its growth forecasts for the 19 eurozone states to 2.7% this year, from 4% in February, and to 2.3% for next year from 2 , 7% as he estimated in his first assessment of the impact of the war in Ukraine on the bloc’s economy.

Also in May, inflation in the euro area was estimated at 6.1% for this year, which in turn was a significant revision from the Commission’s initial estimates of 3.5% inflation.

The European Commission is currently worried that gas supplies from Russia could be completely cut off in response to Western sanctions on Moscow. A complete shutdown of Russian gas supplies, on which Europe is heavily dependent, “is not our baseline scenario, but it is a risk that we cannot rule out. Clearly, we are preparing at EU level, but also at Member State level “, explained Valdis Dombrovskis.