ECB’s Centeno: Interest Rate Cuts Could Help Avoid Recession

18 March 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Mário Centeno on Monday said that monetary policy easing could contribute to avoiding recession in the euro area.

Speaking at an event in Lisbon, Centeno, who heads Banco de Portugal, said, ‘Probably when the decline in interest rates starts to materialise, it will be one of the factors that can help avoid the appearance of a recession.’

Despite the economic stagnation for practically the past year and a half, ‘at the moment we aren’t talking about recession in the euro area’, he said.

However, there was a risk of provoking ‘economic contraction beyond what would be necessary’ if financing conditions were tightened too much, he said.