Wednesday, February 21

The European Central Bank Considers The Chance Of Recession

The European Central Bank considers the chance of Recession in the Eurozone to be Small. The President of the European Central Bank Mario Draghi is confident about obtaining inflation.


Inflation in the eurozone has dropped in the last two months, but according to Draghi inflation will rise in the medium term.

The ECB board was unanimous in its expectation that the chance of a recession is small.

Draghi concedes that some economic indicators were lower than expected and he assumes inflation to remain under pressure in the coming months.

For the longer term, however, it expects inflation to rise to the target of just under 2 percent in the medium term.

He points out that the financial situations are favourable and the labour market is firm. He also notices an increase in wages.

In the past year, this did not seem to continue in a rise in the price level,

 but Draghi points out that corporate profits are already under pressure due to higher wages.

Taxes on goods and the British departure from the European Union remain a risk to the European economy.

The ECB also notes the turmoil in the financial markets of recent months.

Uncertainties about the possibilities of the ECB to intervene in the economy drags Draghi away.

We still have all the tools at our disposal, according to Draghi.

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