ECB’s de Guindos: Risks to Growth Balanced, Geopolitics Main Source of Uncertainty

19 February 2026

By Marta Vilar – VALENCIA, Spain (Econostream) – European Central Bank Vice President Luis de Guindos said on Thursday that risks to the outlook were balanced, and geopolitical tensions were the main source of uncertainty.

In a speech at the Cámara de Comercio in Valencia, Spain, de Guindos said that economic growth had been “marginally higher” than what the ECB and the European Commission had expected.

“The European economy is performing slightly better than we expected, given all the uncertainty following the decisions of the US administration,” he said, noting that stronger-than-expected domestic demand and the fact that the full impact of recent decisions has yet to materialize were behind the resilience.

The services sector was performing better than the industrial sector, he said, which he described as “logical” given the weaker contribution from external demand.

“Risks are balanced, though the main source of uncertainty remains the geopolitical environment,” he said.

The latest inflation developments were positive, according to de Guindos, who added that recent data suggested inflation was below the price stability target while core inflation was approaching 2%.

He described the slowdown in services inflation as “encouraging”, noting that wage growth was “broadly in line” with the ECB’s projections.

The current level of interest rates was “appropriate” because it ensured that inflation would reach 2% in the medium term, he said.

“From a communication standpoint, given the political uncertainty and the geopolitical risks that have emerged and intensified in recent months, we will maintain an open, meeting-by-meeting approach to our decisions,” he said. “We have no predetermined path for interest rates.”

De Guindos described China as “Europe’s main competitor” internally and internationally, noting that it had made substantial competitiveness gains on top of its existing excess capacity.

The penetration of Chinese products in Europe, as well as the level of competition in international markets, had increased, he said.