A more moderate monetary tightening than in past months. The European Central Bank (ECB) raised its key interest rates by 0.50 percentage point on Thursday 15 December. A decision taken to continue to fight inflation.
The rate remunerating bank cash not distributed in credit rose to 2% and that on short-term refinancing operations to 2.50%, the highest since the end of 2008, detailed in a press release the ECB, which “plans to continue to raise” its rates in the coming months.
Inflation estimated at 6.3% in 2023
According to the new ECB forecasts, the euro zone should avoid recession next year but suffer from still high inflation due to the war in Ukraine and the energy crisis.
GDP (Gross Domestic Product) growth is expected to reach 0.5% in 2023, compared to 0.9% forecast in September, then 1.9% in 2024 and 1.8% in 2025. Inflation is expected to rise to 6.3% next year, against 5.5% previously forecast, before declining to 3.4% in 2024 and 2.3% in 2025, close to the 2% target in the long term.