High inflation and renewed supply disruptions across industries cloud Europe’s economic outlook in 2022 and beyond

Russia’s invasion in Ukraine has prompted us to revise downward our output growth estimates for the Euro Area. Headwinds to economic growth including supply chain disruptions, soaring energy and commodity costs, and rattled confidence have intensified. Consequently, we downgrade Euro Area’s 2022 GDP growth forecast from 3.8 to 2.8 percent, and for 2023 from 1.9 to 1.6 percent.