EU’s Gentolini: We will have a recession this winter

Europe will fall into a recession this winter and growth will not return before spring, European Economy Commissioner Paolo Gentiloni said on Monday.

“We will have a recession this winter,” he told reporters before a Eurogroup meeting in Brussels.

Real GDP growth in the EU surprised on the upside in the first half of 2022, as consumers vigorously resumed spending, particularly on services, following the easing of COVID-19 containment measures. The expansion continued in the third quarter, though at a considerably weaker pace.

Amid elevated uncertainty, high energy price pressures, erosion of households’ purchasing power, a weaker external environment and tighter financing conditions are expected to tip the EU, the euro area and most Member States into recession in the last quarter of the year. As inflation keeps cutting into households’ disposable incomes, the contraction of economic activity is set to continue in the first quarter of 2023, according to the EU’s latest forecast.