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EU cuts economic growth forecast as war’s repercussions widen

BRUSSELS ( Associated Press) – The European Union has slashed its forecast for economic growth in the 27-nation bloc amid the prospect of an end to the Russian war in Ukraine. and disruption of energy supply,

EU GDP will expand by 2.7% this year and 2.3% in 2023, the bloc’s executive branch said on Monday – its first economic predictions since Russia invaded Ukraine on February 24.

The European Commission’s previous outlook expects growth at 4% this year and 2.8% in 2023. The EU economy grew 5.4% last year after a deep recession induced by the COVID-19 pandemic, GDP declined by 5.9% in 2020.

“Russia’s invasion of Ukraine posed new challenges, just as the union was reeling from the economic effects of the pandemic,” the commission said in a forecast. “War is increasing already existing barriers to development.”

The war darkened what was generally a bright economic picture for the European Union. Earlier this year, European policymakers were counting on solid, if weak, growth while battling rising inflation from the global energy squeeze,

Now, energy has become a major problem for the EU as it seeks sanctions that deprive Russia of tens of billions in trade revenue without putting member countries into recession. rising energy prices are driving record inflation, making everything from food to housing more expensive,

Russia is the EU’s top supplier of oilNatural gas and coal account for about a quarter of the block’s total energy. The EU imported a total of 99 billion euros ($103 billion) of energy from Russia last year, or 62% of the bloc’s purchases of Russian goods.

EU ban on coal from Russia A voluntary effort is underway to reduce demand for Russian natural gas, due to start in August This year by two thirds. A proposed oil embargo has hit the odds Among the reservations from some landlocked countries that are highly dependent on Russian oil, such as Hungary.

All this has left the EU to secure an alternative supply of energy In the coming months, more will come from fossil-fuel exporting countries such as the United States and from domestic renewable sources, aimed at helping the bloc achieve its long-term climate goals.

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