Revised figure comes as impact of Red Sea trade disruption proves milder than expected
A ship transits the Suez Canal towards the Red Sea. Euro zone inflation is set to drop faster than previously expected this year as the impact of Red Sea trade disruption proves milder than expected, according to updated EU estimates. Photograph: Sayed Hassan/Getty ImagesEuro zone inflation is set to drop faster than previously expected this year as the impact of Red Sea trade disruption proves milder than expected, according to updated EU estimates.
“An acceleration is taking place, in an environment where inflation is going down, so we expect a possible increase of private consumption and the situation of the labour market remains quite strong,” said European Union economy commissioner Paolo Gentiloni on Monday.Yuno Energy announces another electricity price cut
Mr Gentiloni warned the uptick in growth is “very moderate” and subject to downside risks linked to an “uncertain, dangerous” geopolitical environment. However, Europe’s economy has been slower than other regions to rebound from the impact of the pandemic and was hit harder by the fallout from Russia’s invasion of Ukraine. Growth in the region is expected to remain weaker than the US and China.
Fiscal policy is also weighing on European growth as many governments in the region are reducing their spending in response to the reintroduction of EU fiscal rules that limit budget deficits and debt levels from this year.
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