EU recession expected to hit Member States, including Belgium

Economic uncertainty and political instability in the European Union puts nations within the eurozone and most Member States in severe likelihood of tipping into a recession by the end of this year, the European Commission warned.

Following a Covid-19 pandemic dark period, the EU economy performed relatively strongly in the first half of the year but has now entered a "much more challenging phase," the Commission wrote on Friday in its new economic growth forecast.

"Amid elevated uncertainty, high energy prices, the erosion of household purchasing power, a weaker external environment and tighter financing conditions, the EU, eurozone and most Member States are expected to tip into recession in the last quarter of the year."

The euro area growth in 2022 is set to be better than previously forecast, expected to reach 3.2%, up from the projected 2.7%. However, the outlook for 2023 is "significantly weaker" for growth and higher for inflation compared to its Summer forecast, when it predicted a eurozone growth of 1.4% next year.

"The economic outlook for next year has weakened and we expect only 0.3% growth of the EU economy next year," Valdis Dombrovskis, the Commissioner for Trade.

"This is a turning point for the EU economy as we deal with the spillovers of Russia's unprovoked war against Ukraine and a complex geopolitical environment: high energy prices fuelling inflation , people across Europe struggling with rising living costs, and our companies losing competitiveness.

The Commission added that the Eurozone inflation would peak at 8.5% this year. While it should drop in 2023, it is expected to remain at a high level. Meanwhile, consumer prices would still rise by 6.1% next year.

For Belgium, the Commission forecasts economic growth of 2.8% this year and 0.2% next year. Inflation would peak at 10.4% this year, falling to 6.2% next year.

EU assurances

Despite the challenges the EU economy is currently facing, the Commission pointed to the fact that the labour market has continued performing strongly. Employment and participation in the labour market are at their highest: the number of employed persons in the EU increased to an all-time high of 213.4 million. Unemployment is at its lowest in decades (6%).

Labour markets are expected to react to the slowing of economic activity with a lag, but to remain resilient, the Commission explained.

"This strong labour market coupled with reforms and investments in the Recovery and Resilience Facility should help to support the economy," Dombrovskis said.

"Our focus now is to support the most vulnerable with targeted measures, align fiscal and monetary policies to tackle inflation, and secure our future energy supplies as fast as possible."



European Commission Executive Vice-President Valdis Dombrovskis (L) and European Commissioner for Economy, Paolo Gentiloni ​ © BELGA PHOTO (Valeria Mongelli / AFP)



Get updates in your mailbox

By clicking "Subscribe" I confirm I have read and agree to the Privacy Policy.


Belga News Agency delivers dependable, rapid and high-quality information 24 hours a day, 7 days a week, from Belgium and abroad to all Belgian media. The information covers all sectors, from politics, economics and finance to social affairs, sports and culture, not to mention entertainment and lifestyle.

Every day, our journalists and press photographers produce hundreds of photos and news stories, dozens of online information items, plus audio and video bulletins, all in both national languages. Since the end of March 2022 English has been added as a language.

For public institutions, businesses and various organisations that need reliable information, Belga News Agency also offers a comprehensive range of corporate services to meet all their communication needs.


Arduinkaai 29 1000 Brussels