MNI BRIEF: Growing Risk Of Eurozone Recession - Gentiloni

The risk of a eurozone recession has increased even though it is not inevitable, Europe's Economy Commissioner Paulo Gentiloni said Friday. The energy spending packages introduced by some governments would increase substantially from the present estimate of 0.9% of GDP by year end, perhaps helping slow any downturn, he said.

“There is scope for measures to be more targeted to the most vulnerable households and firms, as we have consistently recommended in our guidance to Member States," Gentiloni said, but noted that this was not always easy to follow, given the hit to even middle-income consumers and businesses. Eurogroup President Paschal Donohoe, speaking at the same event said euro area finance ministers are determined to coordinate their fiscal policies with the monetary stance of the ECB so as to avoid adding to inflation.

On Thursday, the ECB downgraded their outlook for the economy, now expecting the economy to grow by 3.1% in 2022, 0.9% in 2023 and 1.9% in 2024, but continued inflationary pressure sees policymakers set on a continued path of policy tightening.