The Eurozone economy will continue to grow in the coming years and is unlikely to slip into any deeper or more permanent recession. This was stated today by the Chief Economist of the European Central Bank (ECB) Philip Lane.
The economy will grow
“There are a number of reasons to believe that the European economy will grow over the next few years,” Lane said in a podcast posted on the bank’s website. He pointed out that the economy has not yet fully recovered from the slowdown caused by the covid-19 pandemic, which gives it room for growth. He also pointed to a significant drop in energy prices, slowing inflation and rising wages. “Households should be in a better financial position over time,” he added.
The ECB started raising interest rates last July in response to rising inflation. However, Lane stressed today that the bank’s aim is not to significantly reduce demand, but to ensure that demand does not grow faster than supply.
Assumption
The ECB anticipates that the gross domestic product (GDP) of the Eurozone will increase by 0.9 percent this year. In the next year, growth is expected to accelerate to 1.5 percent. However, some economists consider these forecasts too optimistic, Reuters wrote. The Eurostat statistics office announced last week that the eurozone economy grew by 0.3 percent in the second quarter after stagnating in the first quarter.
source: ČTK
