The European Union’s economics chief says Russia’s warfare with Ukraine will set off a progress slowdown this 12 months, warning the bloc’s present progress forecast of 4% is now now not viable.

European commissioner for economics and taxation, Paolo Gentiloni, mentioned Saturday that the Ukraine disaster will usher in a interval of decrease progress for the 19 international locations sharing the euro.

The bloc’s projection of 4% progress in 2022, issued shortly earlier than Russia’s invasion of Ukraine on Feb. 24, will have to be revised downward, he mentioned.

Nonetheless, in an try to take the sting out of the downbeat evaluation, Gentiloni mentioned there was no prospect of a recession.

“The great factor is that we entered this disaster 5 weeks in the past [on] a superb footing, and we have been estimating for this 12 months 4% progress,” Gentiloni advised CNBC’s Steve Sedgwick on the Ambrosetti Discussion board in Cernobbio, Italy.

“It will decelerate, for certain, however the carryover of the earlier state of affairs of how our financial system went in 2021 will keep. And I believe that we’re not working a threat [of] coming into detrimental territory general in 2022,” he added.

Gentiloni mentioned the financial outlook hinged on three elements: the length of Russia’s onslaught in Ukraine, whether or not sanction dynamics will spill over to Russia’s power exports and the way the Ukraine disaster could affect investor and shopper confidence.

“Because of this I believe we have now to reassure our residents, our enterprise people who sure, we are going to decelerate in our progress however we’re not coming into a recession,” Gentiloni mentioned.

His feedback echoed remarks made earlier within the week, wherein Gentiloni emphasised the significance of making certain the financial restoration is just not derailed by the Kremlin’s actions and mentioned the Ukraine disaster should not result in elevated divergence within the bloc.

The EU is regarded as getting ready additional financial sanctions in opposition to Russia, though Gentiloni advised Reuters on Saturday that any further measures wouldn’t have an effect on the power sector.