European Central Bank Denies Stagflation is Likely, After Predicting Inflation Was 'Temporary'

European Central Bank Denies Stagflation is Likely, After Predicting Inflation Was 'Temporary'


The European Central Bank has predicted that the eurozone will not fall into an era of stagflation, following previous predictions that the inflationary crisis would be “temporary”.

In a report issued on Tuesday, the Frankfurt-based central bank said that it does not believe the region will suffer under 1970s-style stagflation, in which high inflation is paired with slow economic growth and high unemployment.

The ECB defined stagflation as inflation the confluence of “price stability objective of two per cent” and zero or negative growth being experienced for at least a two-year period, saying that the current economic situation would need to extend until the end of 2023.

The central bankers predicted that by the end of next year inflation would return to below

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