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  • World - Europe
  • Updated: November 11, 2022

Eurozone Recession Looms As Inflation Hangs On, EU Says

Eurozone Recession Looms As Inflation Hangs On, EU Says

The Eurozone economy will slide into recession over the winter and will grow less than expected next year, the EU executive commission said on Friday.

The warning comes as peak inflation hangs on for longer than expected and high fuel and heating costs erode consumer purchasing power.

The European Commission's autumn forecast released on Friday predicts falling economic output in the last three months of this year and the first months of 2023.

High energy prices, the rising cost of living, higher interest rates and slowing global trade "are expected to tip the EU, the euro area, and most member states into recession in the last quarter of the year,” the forecast highlighted.

Paolo Gentiloni, European commissioner for the economy said; "The EU economy is at a turning point.

"After a surprisingly strong first half of the year, the EU economy lost momentum in the third quarter and recent survey data point to a contraction for the winter. The outlook for next year has weakened significantly."

Gentiloni added; "We are approaching the end of a year in which Russia has cast the dark shadow of war across our continent once again.

"The EU economy has shown great resilience to the shockwaves this has caused. Yet soaring energy prices and rampant inflation are now taking their toll and we face a very challenging period both socially and economically."

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