LONDON – Credit rating agency S&P Global cut its euro zone growth forecast for the year on Monday to 3.3% from 4.4% previously, saying higher energy prices caused by the Russia-Ukraine war would hit households’ spending power.
“Thanks to a strong recovery momentum and sufficient cash buffers, we don’t expect a full-year recession but rather a drop in GDP growth to 3.3% this year versus 4.4% previously,” S&P said in a report.
It added that as close neighbours to Russia and Ukraine, European countries were among the most exposed to the crisis.
“Uncertainty surrounding our forecasts is higher than usual, with downside risks to growth for 2022 and upside risks for inflation this year and next.”
(Reporting by Marc Jones; editing by Danilo Masoni)