Figures recently released by UK and European agencies show that the UK, the EU and the eurozone are all recovering from the coronavirus pandemic. Despite Brexit warnings, however, Britain’s GDP growth has surpassed that of the bloc and has grown beyond pre-pandemic levels.
According to the Office of National Statistics (ONS) in its report published on Wednesday, Britain’s GDP rose by 0.5 per cent in May.
Britain’s GDP growth in the 12 months to May 2022 was also reported to be healthy 3.5 per cent.
Eurostat said on May 17 that EU GDP rose 0.4 percent in the first quarter of 2022, while eurozone GDP rose 0.3 percent.
Compared to the same quarter in 2021, seasonally adjusted GDP increased by 5.1 percent in the eurozone and by 5.2 percent in the EU.
The ONS added that “monthly GDP is now estimated to be 1.7 per cent above its pre-coronavirus (COVID-19) pandemic levels” in the UK.
In contrast, the EU’s official statistics bureau, Eurostat, said on 29 June that “[EU] GDP will remain 0.8 percent below the 2019 pre-COVID level ”.
In their spring 2022 economic forecast, the European Commission pointed out the blame for Russia’s invasion of Ukraine for their economic problems.
They said: “By exerting further upward pressure on commodity prices, causing renewed supply disruptions and increased uncertainty, the war is exacerbating pre-existing headwinds to growth, which were previously expected to slow.
“This has led the European Commission to revise the EU’s downward growth outlook and upward inflation forecast.”
Real GDP growth in both the EU and the eurozone is now expected at 2.7 percent in 2022 and 2.3 percent in 2023, down from 4.0 percent and 2.8 percent, respectively.
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It comes while the EU’s inflation forecast has risen to 8.3 percent in new forecasts from the European Commission.
The European Commission revised inflation forecasts in Europe from 6.8 percent in 2022 and 3.2 percent in 2023 to 8.3 percent and 4.6 percent, respectively.
Paolo Gentiloni, Europe’s Commissioner for Economic Affairs, said in a statement: “Moscow’s actions are disrupting energy and grain supplies, pushing up prices and weakening confidence.
“Record high inflation is now expected to peak later this year and gradually decline in 2023. With the course of the war and the reliability of gas supplies unknown, this forecast is subject to high uncertainty and downward risks.”
It also comes as Kay Neufeld and Jonas Keck, economists at the Center for Economic and Business Research, said Russia’s invasion of Ukraine had created “a veritable pan-European crisis” and said there were at least two out of five chances of a European recession . .
They said earlier this month: “It seems clear that in the event of a European gas shortage, a severe recession will be almost certain.
“This is because European countries are not only connected to each other through energy connections, but also through highly integrated supply chains.
“A tight gas supply will lead to further increases in energy prices for consumers, increase inflationary pressures and demand an even greater share of household disposable income, which is a recession risk in itself.”