The chief economist of the European Central Bank said at a meeting of the Bank in Paris that the conflict in Ukraine could reduce the eurozone GDP by 0.3% -0.4% this year, sources told Reuters.
This was the “middle” scenario that Lane presented at the board meeting on Thursday, hours after the Russian invasion of Ukraine.
Lane also presented an unfavorable scenario where GDP would fall by 1% and a mild scenario where events in Ukraine would have no effect on the eurozone, which is now considered unlikely.
One source described the estimates as “very early” and another that they came mainly from commodity prices.
All sources said that Lane would make more careful predictions at the March 10 meeting, at which the ECB is expected to decide on the future of the support program.
Lane did not present new forecasts for inflation, but said at the meeting that there would be a significant increase in forecasts for 2022, while hinting that estimates at the end of the horizon could continue to be below the target by 2%.
The ECB’s forecast horizon currently extends to 2024.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
