EU warns of slow growth and high inflation.
The European Union (EU) will lower its growth forecast and raise its inflation forecast, amid concerns that the impact of the Middle East conflict is increasing the risk of "stagnant inflation"—that is, slow economic growth but rising prices. This warning was issued by the EU Economic Commissioner.
The upcoming spring economic report, due this week, is expected to clearly reflect the shock of sharply rising energy prices and continued disruptions to oil supply due to the closure of the Strait of Hormuz. Oil prices remain above $100 per barrel, increasing inflationary pressure and threatening European growth. The EU has also warned that its fiscal support capacity is now more limited than during the Covid-19 pandemic. Meanwhile, the International Energy Agency reports that global oil inventories are falling at a record rate, increasing the risk of future supply shortages.
According to several international financial institutions, Europe is currently facing three major pressures simultaneously: the resurgence of inflation due to rising energy prices, weakening growth, and an increasingly unstable geopolitical environment.
Against this backdrop, the European Central Bank (ECB) faces a particularly difficult dilemma. Further interest rate hikes could weaken the Eurozone economy even more, but easing policy too soon risks reigniting inflation. Many experts believe that if tensions in the Middle East persist for several more months, the European economy could enter a new period of stagnant growth, with the risk of widespread declines from the industrial sector to consumption and the labor market.
Source: https://vtv.vn/eu-canh-bao-tang-truong-cham-lam-phat-cao-100260519145103902.htm
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