ECB’s Vujčić: ‘Risk of a Recession Is Now Much, Much Lower’

9 March 2023

By David Barwick – GENEVA (Econostream) – The likelihood of a euro area economic downturn is far lower now than it appeared to be a few months ago, European Central Bank Governing Council member Boris Vujčić said Thursday.

Speaking at a public event at a university, Vujčić, who heads the Croatian National Bank said, ‘I think that we are in a much better situation now than people thought a quarter ago.’

‘A quarter ago, people were afraid that there might be energy restrictions in Europe [that] might have pushed us into a significant recession’, he said. Europe got ‘lucky’ with respect to the relatively mild winter, the Covid-19 measures in China and the heavy rain in Brazil that reduced demand for liquefied natural gas, he said.

‘All this has worked towards the much better outcomes … and I think that the risk of a recession is now much, much lower, which creates, I would say, a better environment for the soft landing in Europe than it looked’, he said.

In the context of a discussion of euro accession candidate Bulgaria, Vujčić suggested that meeting one criterion for euro adoption there might be easier ‘probably next year, when the inflation rate comes down’.