Eurozone is not facing recession, says Nowotny (ECB)


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Eurozone is not facing recession, says Nowotny (ECB)

The governor of the Oesterreichische National bank, central bank of Austria, Ewald Nowotny, said on the sidelines of a Lamfalussy lecture conference in Budapest, that the eurozone was not headed towards a recession, despite a steep decline in the purchasing manager’s index, largely led by Germany’s seeping drop of PMI data below 50.0 level.

As an ECB meeting is due later this week, the comment of ECB’s Nowotony seems to sparkle a stimulus and signal a positive outlook towards interest rate, however, the ECB might not be able to hike interest rate further to grapple with the ongoing global slowdown and financial shrinkage in multiple major economies including China, Germany and Italy.

According to the European Central bank council member and the Austrian Central bank Chair, the euro zone still appeared to be solid despite growing worries and uncertainties regarding recent economic developments.

During a lecture in an event in Budapest, the ECB council member had been quoted saying, “I assume that we will be able to overcome these negative influences. It will not come to a recession."

Seemingly as week as last summer, the growth in currency was 0.2 percent in the fourth quarter of 2018, while the Italian economy had experienced a squeezing of 0.2 percent, and the country could technically be remarked as in a recession, as its GDP (gross domestic product) had fallen two quarters in a row.

Despite an overwhelming economic outlook in the Eurozone, the ECB keeps overruling the risks associated with global slowdown’s impact on Europe, although, the European central bank would likely to keep the interest rate unchanged to 0.75 percent.