Central European: the euro economy shows no signs of deflation

European Central Bank President Christine Lagarde assured Monday that the eurozone economy would show no signs of “deflation” in the near future, despite the effects of the Russian invasion of Ukraine.

“At the moment we see no elements of deflation” in the eurozone, Lagarde said during a panel discussion at the Montagnier Institute in Paris.

He explained that this assessment applies to the years 2022, 2023, and 2024 in answer to a question about fears of entering the European economy in a recession accompanied by high inflation.

The Russian invasion of Ukraine, which began on February 24, raised fears of a slowdown in the global economy. In what has caused a steady and rapid increase in the prices of prime materials, in particular energy resources, and has generated concern about the disruption of supply chains, in one moment in which the world was gradually emerging from the impact of a two-year COVID-19 pandemic.

Given that it was directly affected by the aftermath of the Russian invasion of Ukraine, the eurozone could lose 1.4 percentage points of its economic growth within a year, according to estimates announced Thursday by the Organization for Economic Co-operation and Development.

For its part, the European Central Bank lowered its growth forecast in March to 3.7%.area of the euro quest year.

The bank has prepared several estimates Based on several possibilities. According to the “severe” scenario, which takes into account, for example, the serious consequences on the availability of energy resources, economic growth will drop to 2.3% in 2022 and 2023 and to 1.9% in 2024.

The European Bank, based in the German city of Frankfurt, expected the inflation rate to reach 5.1% quest year but could reach 7.1% if the “severe” conflict scenario were also realized in Ukraine.

However, this percentage will drop to 2.7% in 2023 and 1.9% in 2024, according to estimates by the European Central Bank.

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