Philenews

ECB Does Not Foresee Recession in the Eurozone

Published March 20, 2026, 12:14
ECB Does Not Foresee Recession in the Eurozone

The European Central Bank (ECB) does not foresee a recession in the Eurozone, even in scenarios involving prolonged energy price increases, according to the Governor of the Bank of France, François Villeroy de Galhau. The ECB has developed various scenarios, including a more optimistic one, with none predicting a negative economic trajectory. Villeroy de Galhau dismissed concerns about stagflation, emphasizing that preventing the spread of energy price increases to broader consumption is the key issue. The French central banker pointed out that energy prices represent only a part of overall inflation, citing France as an example, where energy accounts for approximately 9% of the consumer price index. Preventing the transmission of increases to the rest of the consumer basket is crucial for limiting price pressures. This statement comes after the ECB's decision to keep its key interest rate at 2%, despite the price increases linked to the war in the Middle East. The Bank acknowledged the uncertainty surrounding economic prospects, which creates risks for both inflation and growth. Villeroy de Galhau stressed that vigilance is the key message at the moment, as developments in energy and inflation remain uncertain. The ECB is closely monitoring the situation and is ready to take necessary measures to ensure price stability and economic growth in the Eurozone.