BELGIAN — According to officials, the euro zone finance ministers will announce on Monday that the fight against inflation is the current priority despite the bloc’s slowing growth. They will be informed of the worsening economic outlook.
The EU executive commission is anticipated to provide an update of its economic forecasts, showing slower growth and higher inflation, at a regular monthly meeting of ministers.
Ministers’ attention will be directed toward reducing inflation, showing a desire to move further away from the significant economic stimulus provided during the COVID-19 pandemic’s acute phase.
One official said, echoing the European Fiscal Board’s (EBF) recommendation for “a moderately restrictive fiscal policy” for the coming year, that the fiscal advice should acknowledge that “we have moved away from the need to help the economy.”
Ministers will discuss the EBF’s recommendation on Monday. The EBF urged fiscal restraint, particularly for nations with high debt levels like Italy, Greece, or France.
Before governments create their annual national budgets for the following year, the fiscal stance for 2023 is being discussed.
The effort to combat inflation, which would support the planned tightening of monetary conditions by the European Central Bank, is made despite an anticipated further slowdown in economic growth.
When it updates its outlook on Thursday, the Commission is expected to again lower its projections for the euro zone, according to officials.
In its first analysis of how the war in Ukraine has affected the bloc’s economy, it reduced its growth forecasts for the 19 countries that share the euro in May to 2.7 percent this year from 4.0 percent predicted in February and to 2.3 percent next year from 2.7 percent.
The 6.1 percent predicted by the Commission for this year, which was a significant increase from the earlier estimated 3.5 percent, is also expected to be revised upward.
At the meeting, the International Monetary Fund will also inform the ministers of the euro zone about its most recent evaluation of the region’s economy.
