According to European Central Bank Vice-President Luis de Guindos, the Eurozone most likely did not increase at the end of last year, based on early evidence.
In remarks at a conference in Madrid on Wednesday, de Guindos emphasised that economic activity has remained clearly sluggish.
“Soft indicators point to an economic contraction in December too, confirming the possibility of a technical recession,” he said. A technical recession is usually defined as a two-quarter decrease in GDP.
According to de Guindos, growth was “disappointing” and “the slowdown in activity appears to be broad-based, with construction and manufacturing being particularly affected.” The ECB vice president stated that “services are also set to soften in the coming months as a result of weaker activity in the rest of the economy.”
The ECB also warned of bleak short-term prospects, stating that the high pace of deflation experienced last year was likely to “slow down in 2024 and to pause temporarily at the beginning of the year.”
According to statistics, consumer price rise in the 20-member bloc accelerated from 2.4% in November to 2.9% in December. However, price increases are projected to decelerate in the following quarters.
