Recognizing that the Eurozone is entering recession and of course, the Vice President stresses that the rule must continue to raise interest rates in order to keep inflation under control and likely to remain well above the stability target And they have no option but to work for 2 % inflation in the medium term. Certainly, according to Vice President Luis de Guindos, the increase in interest rates will be effective in preventing recession and certainly controlling inflation is very important and efforts should be made for this.
On Thursday, December 15, the facility rate was raised by the ECB by 50 basis points to 2% and according to the interview conducted on the same day with the French daily Gaia and on December the bank was admitted by the vice president that during the fourth quarter of 2022 The European economy will go into negative territory and GDP is expected to close at 0.2% and according to him this is not a good sign and according to his projections he expects the euro area to close in the last quarter of this year and the first quarter of 2030. While it can be expected to give 0.1% of GDP, it will go to Halki.
The September projections have been recorded and all of these projections have changed substantially with respect to inflation and range from 5.5% to 6.3% for 2023 and 2.3% to 3.4% for 2024, according to Spain’s economy minister. Certainly inflation expectations will be revised upwards significantly.
Where, according to a conference call after the first week’s rate hike, it was announced by ECB President Christine Lagarde that there would be even more hikes next year, and when asked whether the government might be unhappy, her deputy insisting that inflation is currently the The main problem facing countries across Europe and acknowledging that raising interest rates will require governments to increase the cost of funds, he says that for this we will have to stick to our mandate. And with inflation at 10% at present, all are fiercely convinced that they have no choice and, if they do not control inflation, they certainly will not be able to keep a convergent and perfectly stable trajectory, and so on. It will be impossible to pick up the economy again. Of course it is necessary to control inflation and according to them all kinds of borders should be kept well and this will be done under a fixed and flat center plan in every way.
Where his comment comes after the US bank raised the federal funds point by 50 basis points in mid-December and certainly the point 0.5% increase marks the 4th consecutive basis point increase of 75 basis points.