Spring 2022 Economic Forecast: Russian invasion tests EU economic resilience

 The outlook for the EU economy shows that Russia's invasion of Ukraine has posed new challenges, just as the Union had recovered from the economic impacts of the pandemic. By exerting further upward pressures on commodity prices, causing renewed supply disruptions and increasing uncertainty, the war is exacerbating pre-existing headwinds to growth, which were previously expected to subside. This has led the European Commission to revise the EU's growth outlook downwards, and the forecast for inflation upwards. Real GDP growth in both the EU and the euro area is now expected at 2.7% in 2022 and 2.3% in 2023. Inflation in the euro area is projected at 6.1% in 2022, before falling to 2.7% in 2023. For the EU, inflation is expected to increase from 2.9% in 2021 to 6.8% in 2022, and fall back to 3.2% in 2023. Unemployment rates are forecast to decline further, to 6.7% this year and 6.5% in 2023 in the EU and to 7.3% and 7.0% in 2022 and 2023 respectively in the euro area. A press release is available online. More information is available on the Spring 2022 Economic Forecast website.