The EU will cut growth outlook, raise inflation forecast as Iran war drives 'stagflationary shock'
The EU plans to lower its growth forecast and raise its inflation outlook due to the economic impact of the Iran war. European Commissioner Valdis Dombrovskis highlighted the challenges posed by rising oil prices and limited policy options. Concerns about potential supply shortages and the depletion of global oil inventories have also been raised.
- ▪The EU will downgrade its growth forecast because of the stagflationary shock caused by the Iran war.
- ▪Oil prices remain above $100 a barrel due to the closure of the Strait of Hormuz.
- ▪The International Energy Agency warned that global oil inventories are depleting at a record pace.
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The EU will downgrade its growth forecast because of the "stagflationary shock" caused by the Iran war, the bloc's commissioner for the economy told CNBC.Valdis Dombrovskis, European Commissioner for Economy and Productivity, told CNBC's Charlotte Reed that the spring forecast, released later this week, will see economic growth figures adjusted down and inflation figures up."We are facing a stagflationary shock," he said on Monday, on the sidelines of the meeting of G7 finance ministers in Paris.Fears of stagflation have risen in recent weeks.
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