Russia’s war of aggression against Ukraine continues to have a negative impact on the EU economy and thus also on Austria. The EU Commission has revised its economic outlook downwards compared to the spring forecast and sees less growth and higher inflation in the countries of the EU and also in Austria than in May. According to this, inflation in this country should average 7.4 percent in 2022 and only weaken to 4.4 percent in 2023. Vienna. In its last forecast in May, the Brussels authorities still assumed inflation in Austria of 6.0 percent for 2022 and expected a decline to 3.0 percent for 2023. The ECB is actually aiming for an inflation rate of 2 percent.
“Many of the negative risks associated with the spring forecast have materialized. Russia’s invasion of Ukraine has put additional upward pressure on energy and food commodity prices,” the commission wrote in its summer forecast on Thursday.
For the euro area and the EU as a whole, the Commission has revised its inflation forecast significantly upwards compared to the spring forecast. Inflation in the euro area is expected to peak at 8.4 percent year-on-year in the third quarter of 2022 and decline steadily from there, the agency expects. It should then fall below 3 percent by the last quarter of 2023.
The prospects for growth in the EU economies are just as bad as the prospects for inflation. The EU Commission has also revised its expectations here and is now assuming a real increase in gross domestic product (GDP) in Austria by 3.7 percent for 2022. In May it was 3.9 percent. A GDP increase of 1.5 percent is expected for 2023 instead of 1.9 percent last time. According to the forecast, growth will be supported by the normalization in the service sector and in tourism. The shortage of skilled workers on the labor market is getting worse and is slowing down growth dynamics.
The Austrian figures for the past year 2021, on the other hand, were revised upwards again – from 4.5 percent economic growth to 4.8 percent.
For the EU economy as a whole, the Commission is assuming a GDP plus of 2.7 percent this year and 1.5 percent in 2023. Growth of 2.6 percent is expected for the euro area in 2022, which will weaken to 1.4 percent in 2023.
Source: Nachrichten
