EU: peak inflation in the eurozone in the first quarter, what’s next?

Compared to the autumn forecast, inflation projections have been revised upwards significantly for this year ‘and’ inflation in the Eurozone is expected to peak in the first quarter of 2022 and remain above 3% until the third quarter of the year.

The upward trend in inflation is confirmed by the forecasts as the ‘indications of future contracts show that energy prices are expected to remain high for longer and that price pressures are spreading to different categories of goods and services’ , the Commissioner stressed.

Overall, euro area inflation is projected to increase from 2.6% in 2021 (2.9% in the EU) to 3.5% (3.9% in the EU) in 2022, before to drop to 1.7% (1.9% in the EU) in 2023. In the autumn forecast, the increase for 2022 in the eurozone was estimated at 2.2%.

On the economic growth front, data from Brussels predict an expansion of the economy this year, again in the euro area, of 4.0% (compared to 4.3% estimated in autumn), and 2.7% in 2023. (compared to 2.4% previously predicted).