The European Commission Monday sharply cut its growth forecast for the euro zone this year to 2.7 percent from 4.0 percent projected only in February due to Russia-Ukraine conflicts.

The EU's executive also revisited its euro zone inflation prediction for 2022, with consumer prices forecast to jump by 6.1 percent year-on-year, much higher than the earlier forecast of 3.5 percent.

"The overwhelming negative factor is the surge in energy prices, driving inflation to record highs and putting a strain on European businesses and households," EU executive vice-president Valdis Dombrovskis said.

The European Central Bank is increasingly expected to increase interest rates in July to tackle soaring inflation, however, critics warn that this could put a brake on economic activity.

For the EU as a whole, including the eight countries that do not use the euro as their currency, the commission had also forecast growth of four percent in February, but has now cut this to 2.7 percent, the same level as for the euro zone.

(With input from AFP)