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S&P lowers its growth forecasts for the Eurozone

S&P lowered its growth forecasts for the Eurozone from 2.7 percent to 2.6 percent.

International credit rating agency Standard & Poor’s (S&P) lowered its growth forecast for the Eurozone this year from 2.7 percent to 2.6 percent and its 2023 expectation from 2.2 percent to 1.9 percent. In the statement made by S&P, it was stated that the Euro Area growth forecasts were lowered due to high inflationary pressures. In the statement, it was noted that the growth forecast of the Euro Area for this year was reduced from 2.7 percent to 2.6 percent, and the expectation for 2023 was reduced from 2.2 percent to 1.9 percent.

Pointing out that inflation forecasts were raised due to high energy and food prices stemming from the current geopolitical context, it was reported that consumer price inflation in the Euro Area is expected to reach 7 percent this year and 3.4 percent next year.

S&P had previously forecasted that inflation in the region would be 6.4 percent this year and 3 percent in 2023.

“CONSUMERS BEGAN TO FEEL THE PRESSURE ON THEIR PURCHASE POWER”

In the statement, it was noted that low international demand is also expected to slow down growth. In the statement, it was stated that consumers began to feel the pressure on their purchasing power, and it was stated that increasing employment and wage increases were not enough to compensate for the rising prices.

In the statement, it was noted that the increased savings during the epidemic and the accumulated demand for services are expected to increase consumption for a while, and it was reported that expenditures will be less than 3 months ago due to the turbulence in the financial markets reducing net wealth.

Emphasizing that the downside risks to growth continue, the statement emphasized that gas shortages may become more evident this year, which could be another “blow” for consumers.

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