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Tags: Europe | Economy

Europe Sees Stronger Economic Rebound, Warns of Energy Costs

Thursday, 11 November 2021 06:01 AM

FRANKFURT, Germany (AP) — The European Commission raised its growth forecast for the year for the 19 countries using the euro, saying Thursday that the economy was bouncing back from the worst of the pandemic as people went back to work in customer-facing jobs.

But the EU’s executive branch lowered the forecast for 2022, warning that high energy prices would eventually hit utility bills for households and businesses and weigh on people's ability to spend.

The economy also faces obstacles from logjams in supplies of parts and raw materials and rising COVID-19 infections, particularly in countries with low vaccination rates.

The autumn forecast released Thursday raised the growth outlook for this year to 5.0% from 4.8% in the summer predictions, while the 2022 growth forecast dropped to 4.3% from 4.5%.

“The European economy is moving from recovery to expansion but is now facing some headwinds," EU Commissioner for Economy Paolo Gentiloni said in a statement accompanying the forecast.

Gentiloni cited the energy price spike, rising inflation, the recent increase in COVID-19 infections, and supply-chain disruptions that are weighing on numerous industries.

After falling sharply in 2020, energy prices have increased at “a tumultuous pace” over the last month and are now above pre-pandemic levels, the report noted.

“High wholesale energy prices are making their way to retail prices for households and producers, though at a varying degree and pace across countries, with potential knock-on effects on consumption and business investment,” it said.

Market prices for natural gas, a key fuel used to generate electricity, spiked to five times their level at the start of this year in Europe due a variety of factors, including depleted reserves, lack of supply from Russia and strong demand in Asia for available supplies of liquid natural gas delivered by ship.

© Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


GlobalTalk
The European Commission raised its growth forecast for the year for the 19 countries using the euro, saying Thursday that the economy was bouncing back from the worst of the pandemic as people went back to work in customer-facing jobs. But the EU's executive branch lowered...
Europe,Economy
295
2021-01-11
Thursday, 11 November 2021 06:01 AM
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