The European Central Bank (ECB) said in a statement on Monday that a sustained increase in oil prices will reduce the potential production of the euro zone by less than 1% in four yearsas reported by Reuters.
The reduction in the production of the block will be a small blow that could be further reduced with the ecological transitionthe ECB has said.
Key points
“Using its own forecasting model, the ECB found that a 1% increase in oil prices would reduce the growth potential of the euro zone by around -0.02% in the medium term”.
“assuming a 40% increase in oil prices in the next four years compared to the period 2017-20, the ECB concluded that the potential production of the euro zone would be reduced by only 0.8% in that period.”
“In particular, for transportation and household energy consumption, there are viable ecological alternatives that depend much less on oil.”
Source: Fx Street
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