5/16, 11:33 AM (Source: TeleTrader)
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Gentiloni: Economy still far from normal situation

European Commissioner for Economy Paolo Gentiloni said on Monday that the euro area economy is "still far from a normal situation," noting that the high degree of uncertainty could push GDP lower and inflation higher than currently projected. In a "severe scenario," taking into account a complete holt of Russian gas to the EU and a continuation of rising prices, GDP would increase 2.5 and 1 percentage point below the forecast baseline in 2022 and 2023, while inflation would be up by 3 points in 2022 and over 1 in 2023 on top of the current projections.

Gentiloni pointed out risks to the downside, including the "unpredictable evolution" of the conflict in Ukraine, as well as the possibility of strong inflationary pressures influencing financing conditions, and the impact of the debt crisis in China's real estate sector. On the positive side, he stated domestic demand "could prove more resilient" if households use up more of their savings and the EU's Recovery and Resilience Facility (RRF) generates a stronger impulse to activity.

Baha Breaking News (BBN) / DJ