EU growth will be “severely impacted” by the disruption stemming from Russia’s invasion of Ukraine, the European Commission warned, as investor confidence dropped sharply in Germany, the union’s biggest economy.
Valdis Dombrovskis, the commission’s executive vice-president, said the commission is expecting 2022 growth to be below the 4 per cent predicted in its most recent forecasts just over a month ago, although it is not predicting the expansion will “completely stop”.
His words, following a meeting of finance ministers in Brussels, came as German investor sentiment fell to its lowest level since the start of the Covid-19 pandemic according to a survey published on Tuesday. The Zew research institute said its economic sentiment index recorded the biggest decline in the 31-year history of its monthly poll of investors, reflecting fears that the EU’s biggest economy could be hit by a recession and soaring inflation as a result of the fallout from Russia’s invasion of Ukraine.