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The new European Commission economic forecasts are set to see euro-area inflation at 2.4% this year and 2.2% in 2022, according to a draft seen by Bloomberg.
The rate will then slow to 1.4% in 2023, the document showed. The predictions are set to be published by the European Union executive on Thursday.
Inflation in the 19-member currency block has been running at the fastest level since 2008, complicating the challenge for policy makers in the region. Most central bankers still claim that price pressures will ease next year as special factors start to fade, but nervousness around the outlook has grown.
The forecasts also see euro-area gross domestic product expanding 5% this year, 4.3% in 2022 and 2.4% the following year. That’s an upgrade of 0.2 percentage points for the 2021 reading and a downgrade by the same amount for 2022.
The Commission is set to highlight downside risks including the current spike in energy prices and the supply squeeze in the forecasts.
Unemployment is projected at 7.9%, 7.5% and 7.3% over the three years.
– Bloomberg