EU Economy Commissioner Dombrovskis says the EU is at risk of stagflation; EZ GDP could be 0.4ppts lower than in the prior forecast; G7 finance ministers to talk about policy action for high energy costs on Monday
- Any national response to higher energy prices must be targeted, temporary, not boost demand for oil and gas, and continue to decarbonise the economy
Context
Dombrovskis' comments on the risk of stagflation in the EU signal significant economic concerns, particularly with revised GDP forecasts suggesting a potential slowdown. The upcoming G7 discussions on policy actions regarding high energy costs highlight the urgency for targeted responses that don't exacerbate inflationary pressures, indicating a delicate balance policymakers must navigate ahead of potential economic fallout.
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