THE EFFECTS OF WAR

EU Commission raises inflation forecast drastically

EU-Fahne. © Sara Kurfeß on Unsplash
EU flag. © Sara Kurfeß on Unsplash

Dark clouds over the European Union. For long-term observers, the latest figures from Brussels are not unexpected, but they are drastic. The EU Commission has significantly increased its forecast for average inflation in 2022. In Brussels, for example, the annual average inflation rate is now 6.1% – ​​previously it was 3.5%.

The forecasts for economic growth are also revised downwards. Economic growth of 4%  was previously assumed, but now it is only 2.7%. The reasons given for this are the war in Ukraine, high prices for energy and other raw materials, and the supply chains that are still disrupted. What is not said is how the massive money printing in the Corona crisis and the interest rate hike in the euro area, which has not yet been initiated, contribute to inflation.

Inflation: Why the ECB is still not raising interest rates

War in Ukraine disturbs the situation

Initially, the EU Commission assumed an inflation rate of only 1.7% for 2022 – now it is significantly more than three times as much. Inflation is then expected to drop to 2.7% in 2023 – probably due to the interest rate hike in July or August, which the European Central Bank (ECB) has already indicated several times. In the USA, the turnaround in interest rates has already taken place and has hit the markets hard.

An inflation rate of 6.1% on an annual average also means that in some months you could even see a double-digit rate of 10% or more. Most recently in April, the inflation was 7.5% in the eurozone.

In the USA, it was recently observed that the inflation rate fell from 8.5% in March to 8.3% in April – it may already have reached its zenith. However, the US Federal Reserve had already announced the interest rate hike many months ago – the market had already adjusted to it.

Europe is threatened by a deep recession

Advertisement
Advertisement
Advertisement

Specials from our Partners

Jobs

Top Posts from our Network

Deep Dives

Europe's Top Unicorn Investments 2022

The full list of companies that reached a valuation of € 1B+ this year
© Behnam Norouzi on Unsplash

Crypto Investment Tracker 2022

The biggest deals in the industry, ranked by Trending Topics

Russia vs. Ukraine

#EuropeansAgainstWar
ThisisEngineering RAEng on Unsplash

Technology explained

Powered by PwC
© addendum

Inside the Blockchain

Die revolutionäre Technologie von Experten erklärt

Podcast: Mit den smartesten Köpfen im Gespräch

Der Podcast von Trending Topics und Tech & Nature
© Shannon Rowies on Unsplash

We ❤️ Founders

Die spannendsten Persönlichkeiten der Startup-Szene
Tokio bei Nacht und Regen. © Unsplash

🤖Big in Japan🤖

Startups - Robots - Entrepreneurs - Tech - Trends

Continue Reading