The European Commission expects the economy to continue to grow following a slowdown in the final quarter of 2021. The EU economy hit pre-pandemic levels in the third quarter of 2021, however it was followed by a 1.8% decline in growth in the fourth quarter. Despite this, it projects 4% growth in 2022 and 2.8% in 2023.
“Multiple headwinds have chilled Europe’s economy this winter: the swift spread of Omicron, a further rise in inflation driven by soaring energy prices and persistent supply-chain disruptions,” Paolo Gentiloni, Commissioner for the Economy, said. “With these headwinds expected to fade progressively, we project growth to pick up speed again already this spring.”
While the report addresses some of the risks to the forecast, the assessment does not take into account the “growing geo-political tensions” in Eastern Europe. Those tensions might affect the economy primarily through steep increases in energy costs, which could result in increases in inflation and decreases in economic output.
