Russia's war against Ukraine continues to negatively affect the EU economy, setting it on a path of lower growth. Annual average inflation is projected to peak at historical highs in 2022 before easing in 2023. The Summer 2022 Economic Forecast projects that the EU economy will grow by 2.7% in 2022 and 1.5% in 2023.
The EU economy remains particularly vulnerable to developments in energy markets due to its high reliance on Russian fossil fuels. Europe maintains its momentum from the rebound of last year. 2022 first quarter was stronger than estimated and is set to prop up the annual growth. Economic activity in the remainder of the year is expected to be subdued, notwithstanding a promising summer tourism season. Overall, the EU economy is set to continue expanding, but at a significantly slower pace than expected in the Spring 2022 Forecast.
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