Apr 15, 2022 04:26AM ET
A survey of economists by the European Central Bank showed Friday that the eurozone economy faces slower economic growth and higher inflation as Russia's invasion of Ukraine drives up costs, disrupts trade and shakes confidence.
Economists surveyed as part of the ECB's Survey of Professional Forecasters (SPF) expect inflation to be 6% this year, double the forecast two months ago, and to remain just above the ECB's 2% target over the longer term.
According to an ECB press release, "Regarding the near-term outlook, respondents considered that high inflation was primarily driven by cost-push factors rather than demand-pull factors, and they considered that the conflict in Ukraine had reignited and intensified price pressures, which were already showing signs of peaking."
Growth was revised down to 2.9% this year from 4.2% last SPF, and the ECB said that "almost all" respondents attributed their downward revisions to the impact of the Russian invasion of Ukraine.
The ECB added that in addition to higher energy and food prices, disruptions in some sectors and the imposed sanctions, the situation has led to a decline in business and consumer confidence and a loss of household purchasing power.