EU officials: Under the shadow of the Iran conflict, the EU will lower economic growth expectations and raise inflation forecasts

Golden Ten Data, May 18 – According to CNBC, EU Economic Commissioner Dombrovskis stated that, due to the “stagflation shock” brought by the Iran war, the EU will lower its economic growth forecast. He indicated that the spring economic forecast to be released later this week will show that economic growth data will be revised down, while inflation data will rise. Dombrovskis said, “We are facing a stagflation shock.” He also added that the policy space for decision-makers is “more limited” now, with hardly any room to implement large-scale fiscal response measures as was done during the pandemic. He said, “We believe that the support measures we take should be temporary and targeted, rather than measures that actually continue to promote the growth of fossil fuel demand.” Meanwhile, Dombrovskis described the EU’s release of strategic oil reserves as “ongoing,” and added that there are concerns about supply shortages in areas such as innovative fuels. He stated, “The longer the conflict continues, the greater the risk of certain supply bottlenecks, which further confirms our view that policy responses should not increase the demand for fossil fuels.”