European Commissioner for Economy Paolo Gentiloni said on Monday that energy prices will continue falling in 2023 but at a slower rate, before rising again slightly in 2024 as oil prices pick up. Meanwhile, the prices of food and non-energy industrial goods should continue decreasing due to reflecting lower input prices and normalizing supply chains, and services inflation is seen moderating "as demand softens under the impact of monetary policy tightening."
Gentiloni pointed to the war in Ukraine, monetary tightening, and natural disasters caused by the climate crisis as potential risk factors threatening the economic outlook. On the other hand, he said rising interest rates could "lead to a faster decline in inflation that would accelerate the restoration of real incomes."
