Euro-Area Fiscal Aid Boosts Growth and Lowers Inflation in 2022


Euro-area economies’ fiscal support measures in response to Russia’s invasion of Ukraine are boosting gross domestic product and temporarily reducing inflation, the European Central Bank said.

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(Bloomberg) — Euro-area economies’ fiscal support measures in response to Russia’s invasion of Ukraine are boosting gross domestic product and temporarily reducing inflation, the European Central Bank said.

The effect on economic growth will be stronger in 2022 and fade next year, the ECB said in a pre-release of its economic bulletin published Tuesday.  

“The total stimulus measures in response to the war are estimated to have an impact of almost 0.4 percentage points on overall growth and a limited impact of just over 0.1 percentage point on inflation,” said economists Cristina Checherita-Westphal, Maximilian Freier and Philip Muggenthaler.

Efforts should be made to increasingly target energy-related measures to vulnerable segments of the population, they added.



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