The European Commission named three main risks for the European economy

The risks for the EU economy have increased significantly, the European Commission stated (EC; Vedomosti got acquainted with its quarterly report). Experts from the main executive body of the EU identified three main threats. The first and key risk is core inflation, a measure that does not take into account energy and food prices. Despite the rate hike by the European Central Bank (ECB), the index continues to rise. Goods, which are part of the core inflation indicator, have become the main driver of price increases, the report says. The index in March hit a record of 7.6%, reminded the EC. Last year, the overall indicator of annual inflation updated monthly highs, but since the end of autumn it began to slow down. Since February, there have been signs of a resumption of negative dynamics: at that time, price growth increased by 0.8% mom, and core inflation began to accelerate in annual terms. The situation is aggravated by the multidirectional actions of the authorities: while the ECB raises the rate, the budgetary and tax policy is softened – the efforts of some are leveled by the steps of others.

EC experts expect core inflation to reach 6.9% by the end of 2023, after which it will slow down to 3.6% in 2024. consequences,” according to the EC.