Winter 2022 Economic Forecast: Positive growth and high inflation necessitate pay rise for workers

According to the Forecast, following a notable expansion by 5.3% in 2021 the EU economy will grow by 4.0% in 2022. The EU as a whole reached its pre-pandemic level of GDP in the third quarter of 2021 and all Member States are projected to have passed this milestone by the end of 2022. Moreover, after reaching a record rate of 4.6% in the fourth quarter of last year, inflation in the euro area is projected to peak at 4.8% in the first quarter of 2022 and remain above 3% until the third quarter of the year.

CESI Secretary General Klaus Heeger said: “The European economy is recovering from the Covid crisis, growth is at very encouraging levels and many companies are comfortably back in the profit zone. At the same time, high inflation becomes an increasing problem for many citizens and workers. The net value of their savings decreases significantly, while wage increases have so far in general not kept pace with inflation. Workers in Europe need a pay rise to reflect at least inflationary developments. The purchasing power of workers must not decrease, workers must not pay the price of inflation. This is especially true for low-income earners that are threatened to face poverty or risks to fall into poverty through inflation. We should not forget that inflation for many goods that make up large shares of the expenditure of low- and medium-income households, such as energy, rents and basic foodstuffts, has recently been far beyond even ‘just’ 4 or 5%.”

More information about the Winter 2022 Economic Forecast is available on the European Commission’s website.