Gas in European countries in 2022 will cost much more than previously expected, continuing to fuel inflation, predicts Angel Talavera, head of the European economy from the British analytical company Oxford Economics, writes RIA Novosti.

The ongoing geopolitical tensions between Russia and Ukraine have prompted our commodities team to significantly raise our energy price outlook for the current year. We now expect oil prices to remain high throughout 2022, at around $86/bbl, up from $73 previously forecast. Likewise for natural gas prices, which now appear to be much higher throughout the year, although we previously expected them to fall rapidly from the second quarter, the expert writes in his note.

Forecasts for gas and oil were raised by "53% and 19%, respectively, the expert added.

These changes have led to a significant adjustment of estimates of inflation in the euro area, the expert noted.

Our new forecast assumes inflation at an average level of 3.9% in 2022, compared with the previous estimate of 2.5%, Talavera said.

Annual inflation in 19 eurozone countries in December accelerated to 5% from 4.9% a month earlier, Eurostat reported. This was the highest figure for the currency bloc, if we count for all 19 countries, Eurostat reported. The main driver of the jump in inflation was energy prices, the European Commission noted.