European Central Bank (ECB) Vice-President Luis de Guindos on Tuesday said rising inflation would continue to have an impact on the EU but that the bloc’s economy would not go into recession as a result of Russia’s invasion of Ukraine.
“Inflation was already high and it will get higher… but we will not enter a recession,” De Guindos said in an interview with Spain’s Antena 3 television.
“Even in the most severe of scenarios we got, the European economy will not go into recession.”
Asked if that could change depending on how long the conflict lasts, de Guindos said it was “very difficult” to predict and that all they could come up with were “scenarios” based on the evolution of the prices of mainly raw materials.
The ECB forecast last week that euro zone growth will be 0.5 percentage points slower this year than previously expected because of the war in Ukraine, but still come in at 3.7%, and 2.8% in 2023.
Inflation, however, is set to average 5.1% in 2022, well above the bank’s target of 2.0%, falling to 2.1% in 2023,according to the ECB forecast.
