Corporate
EU.Review By Keith Zahra
Prolonged War, High inflation raises concern on growth prospects
The European Union had approached the beginning of 2022 with positivity driven by an expansionary phase on the back of an improving health situation, a growing labour market, significant accumulated savings and the disbursement of millions of euro as part of the Recovery and Resilience Facility. The prolonged war in Ukraine has diluted such expectations, resulting in significant pressure on commodities, including energy and grain, and increased uncertainty. Energy prices had already rebounded strongly from the peak days of the pandemic as supply struggled
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to match the global economic rebound. However, given the Russian dominance of the oil and gas market, prices edged up further, and with EU leaders reaching an agreement earlier this month to significantly reduce purchases from the belligerent nation, the full impact might yet to be seen. The war has impacted other commodities, including some industrial metals such as nickel and copper, as well as neon gas, which is a key input for semiconductors. High inflation levels are expected to impact significantly consumer purchasing power, particularly for lower income families who tend to
