The eurozone economy appears to be on the verge of a new recession in 2023 (down 1.7%), admitted yesterday the European Central Bank (ECB), which made an account of the scenario of a prolonged war between Russia and Ukraine.
In a less bad situation, in which the war doesn’t last that long, the single currency area holds up, but the recovery loses strength: it grows 2.8% this year and 2.1% next year. In March, right at the beginning of the conflict, it was 3.7% and 2.8%, respectively.
In any case, central bank interest rates (and all others by dragging) always rise in any of the scenarios, but the greater the inflationary pressures, the more the ECB will have to accelerate the worsening of the cost of money throughout this year. , at least, revealed the monetary authority.
The latest inflation reading (from Eurostat) gave a record price rise in the eurozone of more than 8%. The ECB’s objective is to keep inflation around 2% over the medium term.
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