Given that governments in eurozone have or will opt out of the supportive measures which were put into place in the face of the surging energy prices over a year ago, the regional economy can contract up to 5 percent in 2024, a Bloomberg analysis noted.
FRANKFURT, Aug. 7 (Xinhua) — Aggressive rate hikes by the European Central Bank (ECB) can inflict an adverse impact on the economy of the euro area, and will trim 3.8 percent off from its economic output in 2024, a Bloomberg analysis published on Monday said.
The analysis said that the combination of high interest rates and limited government capacity to stimulate development poses a potential constraint on the economic growth of the euro area.
This photo taken on July 27, 2023 shows the Euro sign in Frankfurt, Germany. (Xinhua/Zhang Fan)
Given that governments in the euro area have or will opt out of the supportive measures which were put into place in the face of the surging energy prices over a year ago, the euro area economy can contract up to 5 percent in 2024, the analysis noted.
The ECB has lifted key interest rates by a total of 425 basis points since last July in a bid to bring down inflation, which is hovering well above its target of 2 percent.
The central bank has refrained from pre-announcing another hike for its next rate-setting meeting, insisting that interest rates will remain its primary tool in the fight against inflation.
