EU raises inflation forecast amid energy crisis

The Commission raised its 2022 inflation forecast for the Eurozone from 2.2 percent to 3.5 percent, and predicted that inflation would fall to 1.7 percent in 2023.

In its statement, the Commission said, “After breaking a record of 4.6% in the last quarter of last year, inflation in the Euro Area will rise to 4.8 percent in the first quarter of this year and will remain above 3 percent until the third quarter. "As supply chain woes ease and energy prices fall, inflation will decline to 2.1 percent in the last quarter," he said.

The report also stated that the inflation outlook will depend on the Ukraine-Russia tension.

There are different views on Eurozone inflation. Some state that inflationary pressures will decrease, while others state that tight monetary policy is needed to reduce inflation at historically high levels.

Finally, Bundesbank Chairman Joachim Nagel also stated that the ECB may increase interest rates this year.