FRANKFURT—Eurozone countries are spending more than they will get back to cushion the economic hit from the Ukraine war via fuel subsidies and other support measures, the European Central Bank said on Tuesday, telling governments to use their cash more efficiently.
The 19 countries that share the euro approved support measures worth 0.9 percent of their gross domestic product, predominantly on measures to offset a surge in energy prices.
But this should only increase euro area GDP growth by about 0.4 percentage points this year and reduce inflation by slightly less than that, mainly via lower energy prices, the ECB said.
In the study, which was used as an input for the ECB’s 2022–24 economic projections, the bank estimated the impact on growth to fade next year and that on inflation to reverse….