According to the Office for National Statistics (ONS) in its report published on Wednesday, UK GDP increased by 0.5% in May. UK GDP growth in the 12 months to May 2022 was also reported to be a healthy 3.5%. Eurostat announced on May 17 that EU GDP grew by 0.4% in the first quarter of 2022, while Eurozone GDP grew by 0.3%. Compared to the same quarter in 2021, seasonally adjusted GDP increased by 5.1% in the Eurozone and by 5.2% in the EU. The ONS added that “monthly GDP is now estimated to be 1.7 per cent above pre-coronavirus (COVID-19) levels” in the UK. In contrast, on June 29 the EU’s official statistical agency Eurostat stated that “[EU] GDP remains 0.8 percent below the pre-COVID 2019 level.” In its 2022 spring economic forecast, the European Commission blamed Russia’s invasion of Ukraine for its economic woes. They said: “By putting further upward pressure on commodity prices, causing renewed supply disruptions and increasing uncertainty, the war is exacerbating pre-existing headwinds to growth that were previously expected to subside. “This has led the European Commission to revise its EU growth outlook downward and its inflation forecast upwards.” Real GDP growth in both the EU and the Eurozone is now expected at 2.7% in 2022 and 2.3% in 2023, up from 4.0% and 2.8% respectively. READ MORE: Brexit LIVE: ‘Two tactical mistakes’ of Johnson’s exit from the EU revealed It comes as the forecast for EU inflation jumped to 8.3% in new forecasts from the European Commission. The European Commission revised its forecasts for inflation in Europe from 6.8% in 2022 and 3.2% in 2023 to 8.3% and 4.6% respectively. Paolo Gentiloni, Europe’s finance commissioner, said in a statement: “Moscow’s actions are disrupting energy and grain supplies, raising prices and undermining confidence. “High inflation is now expected to peak later this year and gradually decline in 2023. With the course of the war unknown and the reliability of natural gas supplies, this forecast is subject to high uncertainty and downside risks.” It also comes as Kay Neufeld and Jonas Keck, economists at the Center for Economic and Business Research, said Russia’s invasion of Ukraine had created “a real pan-European crisis” and said there was at least a two-in-five chance of a European recession. . They said earlier this month: “It seems clear that in the case of European gas shortages, a severe recession will be almost certain. “This is because European countries are connected to each other not only through energy interconnections but also through highly integrated supply chains. “Tight gas supplies will lead to further increases in energy prices for consumers, adding to inflationary pressures and claiming an even greater share of household disposable income, which is itself a recessionary risk.”
