EU countries headed to recession as economic situation deteriorates
The eurozone and most EU countries will head to an economic recession in the last quarter of 2022, according to the European Commission's autumn economic forecast.
"The economic situation has deteriorated markedly and we are heading into two quarters of contraction," said EU economy commissioner Paolo Gentiloni at a press conference.
The EU's executive revised up its inflation forecast from July, predicting that prices would peak at year-end and remain high in 2023. Inflation will average 9.3% in the EU and 8.5% in the eurozone for 2022, Brussels said.
"The EU is among the most exposed advanced economies (to high prices), due to its geographical proximity to the war and heavy reliance on gas imports from Russia," the European Commission said in a statement.
"The energy crisis is eroding households' purchasing power and weighing on production."
GDP growth will be around just 0.3% in the EU and euro area in 2023, the European Commission predicted.
The European Central Bank has meanwhile raised interest rates three times this year to tackle the rising prices.
The bank could continue to raise interest rates, which impacts commercial banks, meaning that mortgages and credit cards would become more expensive.
The central bank's governing council said at the end of last month that inflation remained "far too high and will stay above the target for an extended period."
Inflation in the eurozone reached a record high of 10.7% in October, according to Eurostat's flash estimate at the end of the month.
There have been multiple strike movements in EU countries demanding higher wages due to the record inflation.