MNI BRIEF: EZ Short-Term Uncertainty Low, Long-Term High -ECB
MNI (ROME) - Several measures of concerns over the economic situation in the eurozone over the next 12 months show “relatively low levels of uncertainty,” averaging pre-pandemic levels, but uncertainty is higher in longer-term measures, the European Central Bank said in an article from its Economic Bulletin
While short term uncertainty is much lower than during the months of the Russian invasion of Ukraine, this is not the case with measures of uncertainty over the longer-term, including those related to economic policy, geopolitical risk, climate change, and trade, it said.
Uncertainty tends to have a negative effect on real GDP, with a stronger impact on business investment than on consumption, the paper said, noting that only a rise in geopolitical risk uncertainty does not hit economic activity. (MNI INTERVIEW: Central Bank Uncertainty Tends To Easier Policy)