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Global Economy

New EU price shock: Inflation "will be revised upwards"

Lower economic growth and higher inflation. The EU Commission has again corrected its economic forecast due to the consequences of the Russian war of aggression in Ukraine. In June, the annual inflation rate in the euro area had soared to a record high of 8.6 percent.

Now EU Commission Vice-President Valdis Dombovskis warned on the fringes of the Eurogroup meeting in Brussels: "We can see that economic growth is proving to be quite resilient this year. Nevertheless, a certain downward correction can be expected, and that applies even more to next year. Because there is a lot of uncertainty and risk and unfortunately inflation is still trending higher so it will be revised up once again."

On May 16, the EU Commission lowered its forecast for growth in gross domestic product (GDP) in the euro zone in the current year by 1.3 percentage points to 2.7%.

According to an Allianz survey, high inflation is the topic that worries most Germans. In the survey published this Monday, 57 percent of a good 1,000 respondents named inflation as their main concern. 27.7 percent of respondents spoke out in favor of tax cuts as an antidote.

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