European Union officials said Friday that Europeans can expect oil and gas prices to remain above what they were before the Iran war for at least until the end of 2027, with prices of other goods also following an upward trajectory.
EU Economy Commissioner Valdis Dombrovskis said that higher energy prices are primarily responsible for driving inflation to a forecast 3.1% for this year and 2.4% for 2027. That’s significantly higher than the earlier forecast for this year of 1.9%.
“We expect that this energy inflation will gradually also trickle down to different sectors of the economy,” Dombrovskis said after a meeting of the 21-member eurozone’s finance ministers, who make up the Eurogroup.
European Central Bank President Christine Lagarde said that even if the conflict in the Middle East ended now, “lagging effects” would keep the prices of goods elevated.
“And it’s probably a fact that price levels will be higher at the end of this crisis, when we see the end of the crisis,” Lagarde said.
