|
Oil and gas prices to remain high in
Europe at least until the end of 2027, officials say
[May 23, 2026]
By MENELAOS HADJICOSTIS
NICOSIA,
Cyprus (AP) — 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%. |
From left to right, European Commissioner for Economy and Productivity,
Implementation and Simplification Valdis Dombrovskis, European Central
Bank President Christine Lagarde, President of the Eurogroup Kyriakos
Pierrakakis, Managing Director and the European Stability Mechanism
Pierre Gramegna talk to the media during the Eurogroup finance ministers
meeting in capital Nicosia, Cyprus, Friday, May 22, 2026. (AP Photo/Petros
Karadjias) |
|
“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.
She said that the ECB would take “all the necessary measures” to
keep price stability at 2% by paying close attention to the
aftereffects of the initial economic shock brought on by the
energy price hike. She also pointed to how much oil the EU holds
in reserve to meet possible demand.
Eurogroup President Kyriakos Pierrakakis said that for the EU,
an end to the crisis would mean a return to free navigation
without the imposition of any tolls through the Strait of
Hormuz, from which roughly a fifth of the world’s oil and gas
passes.
Pierrakakis affirmed that economic growth within the eurozone
would reach 0.9% this year and 1.2% in 2027, lower than the
previous forecast, “but clearly far from a recession scenario.”
Although higher inflation projections have led to predictions
that the ECB would raise its interest rate benchmarks to combat
inflation, Lagarde didn’t offer any indication of how the bank
would act.
“We will continue to follow a data-dependent and
meeting-by-meeting approach in order to determine the most
appropriate monetary policy stance in order to deliver on our 2%
medium-term target,” Lagarde said.
All contents © copyright 2026 Associated Press. All rights reserved
|
|
|
