MADRID (Reuters) – The European Central Bank (ECB) expects the currency bloc’s gross domestic product (GDP) to contract or stagnate in the fourth quarter, its vice-president, Luis de Guindos, said on Tuesday.
“We saw stagnation or negative growth in the third quarter and we expect this to continue in the fourth quarter,” he said at an event in Madrid.
Eurozone GDP contracted by 0.1% in the third quarter compared to the previous quarter, according to data released last month by Eurostat.
PMI data released on Monday showed that the slowdown in economic activity in the euro zone accelerated last month as demand in the services sector weakened further, strengthening the prospect of a recession in the block in the fourth quarter.
The European Central Bank (ECB), during its monetary policy meeting on October 26, decided to maintain its key rates at their current level, after ten consecutive increases since July 2022, citing a vigorous transmission of past rate increases to conditions financial and falling inflation.
The vice-president of the ECB indicated that in view of the current high uncertainty, the institution would continue to follow a data-dependent approach regarding its future monetary policy.
(Report Jesus Aguado, written by Emma Pinedo, Claude Chendjou, edited by Blandine Hénault and Kate Entringer)
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