Inflation in the eurozone is forecast to reach 7.6% this year, while throughout Europe is expected to hit 8.3%, according to revised European Commission projections released on Thursday, as Russia’s invasion of Ukraine dampens the region’s economies.
The latest European Commission projections came a day after the United States reported higher-than-expected June inflation of 9.1%.
Concerns over record-high prices are now widespread in Europe, where inflation touched a record 8.6% in June.
In May, the European Commission projected that inflation in the eurozone would peak at 6.1% in 2022 and then decline to 2.7% in 2023. However, both forecasts have been revised up to 7.6 and 4%, respectively, as Europe faced a rising risk of recession after Russia temporarily halted gas flows via major pipelines.
Even though the bloc has been reducing its purchases of Russian gas, these imports are still an important source of energy.
“Moscow’s actions are disrupting energy and grain supplies, pushing up prices and weakening confidence,” Paolo Gentiloni, Europe’s economics commissioner, said in a statement.
“Record-high inflation is now expected to peak later this year and gradually decline in 2023. With the course of the war and the reliability of gas supplies unknown, this forecast is subject to high uncertainty and downside risks,” he added.