The European Union could be on the brink of recession, with inflation approaching five percent due to the conflict in the Middle East, warned Alfred Kamer, director of the European Department of the International Monetary Fund (IMF).

“In the worst-case scenario described in the World Economic Outlook, with a prolonged supply shock and tight financial conditions, the EU could be on the brink of recession, with inflation approaching five percent. None European country is not spared,” Kamer said.

He said the IMF also expects the European Central Bank to raise interest rates by 0.5 percent by the end of this year, maintaining a broadly neutral monetary policy.

“The result could be lower or higher than that, depending on developments in global energy markets in the coming weeks, as well as the state of the eurozone economy, which will affect the strength of the effects of the second round”, Kamer said.

He added that, given that inflation in the eurozone is close to the target level and medium-term expectations are generally stable, the European Central Bank has time to monitor the economic consequences of the conflict in the Middle East before taking further decisions. /tesheshi.com/

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Source: prizrenpost