2024-01-10 12:42:00
Russia is one of the rare countries, with China, to record an increase in real income (archives).
ATS
The slowdown in the economy at the end of the year in the euro zone has increased the risk of a recession in the second half of 2023, and the outlook remains gloomy, a senior European Central Bank (ECB) official said on Wednesday.
“Weak indicators point to a contraction in the economy in December, confirming the possibility of a technical recession in the second half of 2023 and a weak short-term outlook,” said Luis de Guindos, vice-president of the ECB, during ‘a speech in Spain.
A technical recession is defined by two quarters in a row of decline in GDP.
The GDP of the 20 euro zone countries has already fallen by 0.1% from July to September and according to Mr. de Guindos, a contraction in activity in the fourth quarter is therefore likely.
Among the main economies, Germany is experiencing a marked slowdown, penalized by the surge in energy prices, increases in interest rates and the weakening of important export markets, led by China.
“Available data indicates that the future remains uncertain and that the outlook is downward” for growth, added Mr. de Guindos.
In terms of inflation, against which the ECB is carrying out an unprecedented tightening of its monetary policy, the downward trajectory observed for several months will continue, but less quickly, he believes.
“The rapid pace of disinflation (…) should slow down in 2024,” according to Mr. de Guindos.
Inflation fell rapidly for most of 2023 in the euro zone, but rose to 2.9% last month, mainly due to statistical effects linked to the expiration of measures taken to compensate for soaring prices Energy.
After ten consecutive interest rate increases, the ECB has left its rates unchanged since September and is aiming for a gradual return of inflation to its 2% target.
“High wage pressures, the outcome of upcoming wage negotiations and intensifying geopolitical tensions add to uncertainty about the future path of inflation,” the official said.
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