economy
The EU will cut growth outlook, raise inflation forecast as Iran war drives 'stagflationary shock'
The commission's forthcoming spring forecast, released later this week, will see economic growth figures adjusted down and inflation figures up.
TL;DR
- EU's spring forecast will be adjusted downwards for economic growth and upwards for inflation.
- The 'stagflationary shock' is attributed to the Iran war and the closure of the Strait of Hormuz, keeping oil prices above $100 a barrel.
- Policymakers have a limited margin of action, with a focus on temporary and targeted support measures.
- Global oil inventories are plummeting at a record pace, with potential shortages looming.
- The EU is releasing strategic oil reserves, and there are concerns about shortages in specific fuel types.