Euro area inflation forecast has been revised up, while economic growth is expected to slow down, according to the European Commission on Thursday.

Inflation in the euro area is forecast to increase from 2.6% in 2021 to 3.5% in 2022, before declining to 1.7% in 2023, the European Commission said in a statement.

Inflation in the EU is estimated at 2.9% for last year, and expected to come at 3.9% this year, before falling to 1.9% next year.

“After reaching a record rate of 4.6% in the fourth quarter of last year, inflation in the euro area is projected to peak at 4.8% in the first quarter of 2022 and remain above 3% until the third quarter of the year,” the statement said.

“As the pressures from supply constraints and high energy prices fade, inflation is expected to decline to 2.1% in the final quarter of the year, before moving below the European Central Bank’s 2% target throughout 2023,” it added.

As for gross domestic product (GDP) projections, GDP growth in the euro area is expected to come at 4% in 2022, moderating to 2.7% in 2023.

The EU economy is estimated to grow by 4% in 2022 and 2.8% in 2023.

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