European Central Bank Vice President Luis de Guindos warned today that inflation would continue to affect Europe, but that the European economy would not enter a recession as a result of the Russian invasion of Ukraine.
“Inflation was already high and will go even higher … but we will not go into recession,” de Guindos said in an interview with Spanish television channel Antena 3. “Even in the most extreme scenario we have, the European economy “It is not slipping into recession,” he was quoted as saying by Reuters.
Asked if this could change, depending on the duration of the war in Ukraine, de Guindos noted that it is “very difficult” to make a prediction and that what the central bank can do is look at different “scenarios” based on the evolution of prices for basic goods.
THE ECB announced last week that the growth of the Eurozone will be 0.5 percentage points lower this year compared to the initial estimate, due to the war in Ukraine. In particular, in the ECB’s baseline scenario, Eurozone GDP is expected to grow by 3.7% this year and 2.8% in 2023.
Inflation, however, is expected to climb to 5.1% in 2022, well above the bank’s target of 2%, to fall to 2.1% in 2023, according to the latest central bank estimates.
Source: Capital
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