The energy crisis will continue to push inflation higher, according to Brussels-based Bruegel
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The cost-of-living crisis is expected to worsen across Europe, marked by increased food, fuel and electricity prices, according to Maria Demertzis, the deputy director of Brussels-based think tank Bruegel.
She told Euronews on Thursday that the abnormal inflation is a result of skyrocketing energy prices, which “is affecting Europe a lot more than it has affected the US because we depend on Russia a lot more than others do.”
Asked whether Europeans should brace themselves for higher costs, Demertzis said: “I think yes. I think we certainly are going to have another year of this in terms of the inflation being abnormal.
“We have seen here in Belgium, where I live, an increase [in the price] of flour, a doubling of flour [costs], which, of course, has got implications for the price of bread, [which is] quite important.
“We’ll feel it in our pockets when we will fuel our cars, when we buy our weekly food. And I dare say that things probably need to get a little bit worse before they get better. So, in that respect, I think we really need to brace ourselves for a little bit more of this.”
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The EU recently cut its economic growth forecast and hiked inflation projections. Real GDP growth in both the EU and the euro area is now expected to reach 2.7% this year, down from the previous forecast of 4%. Growth is expected to slow further next year to 2.3%.
Meanwhile, inflation – forecast to reach 3.9% just a few months ago – is now expected to average 6.8%.
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