IIF: EU economy may fall into recession soon
According to the Institute of International Finance (IIF), next year the world economy will grow by only 1.2%, that is, growth will be as weak as in 2009, and the eurozone economy will shrink by 2% due to the prolongation of the geopolitical conflict.
Economists Robin Brooks and Jonathan Fortune made that forecast Thursday, adjusted for base effects. According to them, the severity of the coming blow to global GDP depends mainly on the trajectory of the situation in Ukraine. Their baseline scenario is that the conflict will drag on until 2024.
According to the IIF, the slowdown in economic growth will occur in Europe, which was most affected by the conflict. The eurozone economy will shrink by 2% after a sharp decline in consumer and business confidence. In the US, GDP will grow by just 1%, while in Latin America it will grow by 1.2%, as commodity exporters profit well from high food and energy price
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