The Economic Position of Europe Begins to Be a Problem? ECB Philip Lane Featured Commentary

<p>&nbsp;The eurozone economy is expected to continue growing in the coming years and is unlikely to experience a deep or prolonged recession, European Central Bank Chief Economist Philip Lane said on Friday.</p><p><br /></p><p>The economy that shares the euro has slowed broadly in the past three quarters as the manufacturing sector is in deep recession, and economists do not see a recovery this year, pointing to only marginally positive GDP growth in 2023.</p><p><br /></p><p>"There are many reasons to believe that the European economy will grow in the next few years," Lane said in a speech published by the ECB.</p><p><br /></p><p><br /></p><p>The main argument is that the eurozone economy has not yet caught up with the pre-pandemic trend, so this catch-up process should spur growth.</p><p><br /></p><p>Energy prices are now significantly lower than in the early months of Russia's war in Ukraine and this will also ultimately impact consumers, leaving households with higher incomes, Lane argued.</p><p><br /></p><p>The ECB has been raising interest rates at record rates for the past year to slow demand and inflation, but Lane argued that the ECB did not want to push demand to "really slow" and its aim was simply to ensure that growth grew slower than supply.</p><p><br /></p><p>The ECB expects the euro zone economy to grow by 0.9% this year and 1.5% next year, although some economists see this forecast as overly optimistic.</p>