The European Commission says it expects a "sharper-than-expected "slowdown in the EU economy for 2008 amid high inflation, falling real estate markets in some countries and the turmoil on financial markets.

European Union Commissioner for Economic and Monetary Affairs Joaquin Almunia addresses the media on the intern 2008 economic forecast at the European Union Commission headquarters in Brussels, Wednesday Sept. 10, 2008. The European Commision expects a 'sharper-than-expected' slowdown in the EU economy for 2008. The EU executive's latest interim forecast now says growth this year in the 15-nation euro-zone will be only 1.3 percent, down 0.4 percentage points from a previous forecast issued in April. (AP Photo)

The EU's economic and monetary affairs commissioner, Joaquin Al-munia, told media in Brussels that the oil and food crisis is fueling inflation and hampering growth. According to the EU executive's latest interim forecast, growth this year in the euro-zone will be only 1.3 percent, down 0.4 percentage points from a previous forecast issued in April. Growth in the entire 27-nation bloc has also been downgraded from 2 percent to 1.4 percent.

The latest forecast also predicts inflation to average around 3.6 percent in the euro-zone for the remainder of 2008, and predicted "technical recessions," or two consecutive quarters of negative growth for Germany, Spain and Britain.