How Russia’s war could knock out Europe’s economy
By Charles Riley, CNN Business
Stagflation strikes fear into the hearts of economists — and policymakers —the world over. Europe could be headed for something even worse.
Western sanctions imposed following Russia’s invasion of Ukraine have caused global energy prices to spike and consumer confidence to plummet in Europe. Russia is being cut off from Western financial markets.
Economists expect Europe’s economy to suffer as a result. Barclays analysts have slashed their eurozone growth forecast for this year by 1.7 percentage points to 2.4%. Private consumption, investment and exports are all expected to grow at a slower pace across the continent.
At the same time, the prices of energy and other commodities such as wheat and metals are rising fast. Barclays has upped its 2022 eurozone inflation forecast by 1.9 percentage points to 5.6%.
In other words, the war is stoking stagflation, which describes a…
