The Eurozone will be in an economic recession by winter, according to a European Commission report
Brussels: The European Commission’s report has observed that various factors, such as the energy crisis and inflation created in the context of the Ukraine war, will lead to an economic recession in the European Union and the Eurozone. Underscoring these long-standing concerns is the European Commission’s autumn economic forecast, which says the eurozone will slide into recession by the last quarter of the year as a result of the war.
According to the report, Europe is facing unprecedented uncertainty. As the war continues, gas shortages could become a major threat in the winter of 2023. According to the commission, war-related uncertainty, rising energy price pressures, reduced household purchasing power, a weakening environment, and tighter financial conditions all contribute to this post-economic downturn.
Economic growth will be only 0.3%.
Next year’s overall economic growth will be 0.3%.In 2024, it will rise to 1.6% in the EU as a whole and 1.5% in the eurozone. Despite this gloom, the report predicts that the EU will experience 3.3% economic growth beginning in 2021, with strong growth in the first half of 2022.
The most serious economic threat is the expected adversity and shortages in the gas market during the coming winter. This will put severe pressure on other markets as well. This will also affect the European Union, both directly and indirectly. Higher than predicted inflation and disturbances, including high interest rates, in the global financial market will remain a danger.
The Depression and Ireland
According to the report, Ireland’s GDP growth will slow from a projected 7.9% to 3.2% in 2023 and 3.1% in 2024. However, exports from the multinational sector will help the country and serve as the main driver of economic growth. In Ireland, inflation is expected to reach 8.3% this year. It will be 6% in 2023 and 2.8% in 2024, according to the report.
High energy prices are the main driver of inflation in Ireland. Food prices have also been steadily rising in recent months. According to the report, multinational corporations’ strong presence in the Irish economy will continue to destabilise the country’s economic growth. The current high corporate taxes may be temporary. There is a chance that the country’s economic sector will suffer.
As European economic activity declines, inflation will reduce households’ disposable income. This decline will continue in the first quarter of 2023, the report said.
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