The energy crisis will continue to push inflation higher, according to Brussels-based Bruegel
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.”
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%.