The European Central Bank has announced that recession is expected to occur in 19 euro countries, and warned that high energy and inflation prices have increased the risk of financial market turmoil.
“People and companies already feel the effect of high inflation and slowdown in economic activity,” said European Central Bank Vice President Lewis de Gwindos.
With the bank announcing its evaluation, which is issued twice annually for financial stability in the euro area on Wednesday, de Gwindos said, “The risks of financial stability increased, while the technical recession in the euro area has become more likely. ”
The published graph with the report indicates an 80% chance of stagnation in the euro and Britain next year and the possibility of 60% in the United States.
Many European economists and commission have already expected a technical stagnation in the last three months of the year and the first part of next year, as the prices of facilities and very high food costs deprive consumers of purchasing power.
Technical stagnation is two consecutive quarterly or more economic outputs, however, economists in the eurozone business committee use a wider range of information to determine stagnation cases, such as unemployment numbers and shrinkage depth, and the euro area economy achieved 0. 2% in the period from July To September.
Economists expect that growth will resume next spring, with inflation from peak levels, and the decline in winter pressure on natural gas supplies.
The European Central Bank said in the report that high inflation spreads its effects through the economy, which increases the possibility that banks will witness more losses from loans.
Source: a b.
About Author
