The European Union warns of a "stagflation shock". Economic forecasts have been revised downwards, and inflation will rise.

European Commissioner Valdis Dombrovskis stated in an interview with CNBC that the European Commission's spring economic report, which will be published this week, will present weaker economic growth forecasts and higher inflation estimates.

Dombrovskis emphasized that Europe is facing a "stagflationary shock," a situation characterized by weak economic growth and high inflation, exacerbated by the conflict in the Middle East and the blockage in the Strait of Hormuz, which affects oil trade. He warned that governments now have limited maneuvering room compared to the pandemic period, and support measures must be temporary and targeted, without stimulating fossil fuel consumption. Dombrovskis also mentioned that global oil reserves are rapidly declining, and the International Energy Agency has warned about the risks of rising prices due to dwindling stocks.

The European Union continues to use strategic oil reserves to mitigate the energy crisis, but the risks of shortages are increasing as the conflict prolongs.