According to the study by Norwegian economist Hilde C. Bjørnland, European countries are among the most negatively affected globally due to their dependence on oil and gas in production and consumption.

The study, which is cited by Noticias ao Minuto, was presented by the author during the morning of the first day of the annual forum of the European Central Bank (ECB), which is being held until Wednesday in Sintra.

The economist calculates that, on average, a 10% increase in oil prices due to geopolitical tensions or supply constraints could reduce eurozone GDP by 0.5% after two years.

Thus, a 30% increase in oil prices can reduce GDP in the eurozone by 1.5%, with the impact greater when oil price volatility is high.

According to the study, inflation expectations and the associated pass-through of oil price shocks depend on demand and supply conditions in the global oil market, with the contribution of oil price shocks being "substantial" when oil price volatility is high.

Hilde C. Bjørnland points out that the results suggest that high oil price volatility may exacerbate the effect of oil price shocks on inflation.

"Although the impacts of oil price shocks on inflation are smaller when policymakers respond strongly, there is still a portion of inflation to be explained by oil price shocks. This suggests that during periods of high oil price volatility, stabilizing inflation is difficult, albeit important," he reasons.

The economist also stresses that the recent increase in energy prices is due to a combination of rising oil demand and supply disruptions, so she believes that the persistence of shocks, with the increase in other commodity prices, in particular food prices, has already raised inflation expectations and "has the potential to have lasting effects on prices."

Source: Lusa