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He European Central Bank (BCE) yesterday cut its rates again by 25 basis points, 3.50% a 3.25%to try to boost weak economic growth in the eurozone after having controlled the inflation.
“The most recent information on inflation shows that the disinflation process continues as expected,” the bank said in a statement. BCE, based in Frankfurt.
“The perspectives of inflation “They are also affected by the recent downward surprises in the indicators of economic activity,” added the issuer of the euro zone, made up of 20 of the 27 countries in the European Union.
This is the second consecutive cut in the guideline rate of the BCE, which had already made a similar reduction in September, and the third so far this year, after June, of a similar percentage.
The president of BCE, Christine Lagarde, He stated after the announcement that the outlook for economic growth in the eurozone “is oriented downwards” and that “lower confidence could prevent consumption and investment from recovering as quickly as expected.”
After the last meeting of the governors of the BCE, those responsible for monetary policy in the euro zone expressed themselves cautiously and they hinted that the issuer would wait until December before deciding on a new cut.
But since then inflation showed a slowdown.
In September, the price increase in the euro zone was 1.7%standing for the first time in more than three years below the official objective of around 2%.
Furthermore, underlying inflation, which excludes goods with very volatile prices such as energy and food, slowed to 2.7% year-on-yearaccording to Eurostat.
Growth, however, appears sluggishprompting the ECB to cut rates to stimulate consumption and investment.
Among the bad news that the governors figure downward revision in 2024 of the growth of Germany, the largest economy in the bloc, which must register a second consecutive year of recession.
According to German government estimates, the contraction will be 0.2%, after having closed 2023 with a drop in GDP of 0.3%.
In the euro zone, private sector activity contracted in September for the first time in seven months, weighed down by the end of the positive effect of the Paris Olympic Games. Eurozone GDP growth was 0.2% in the second quarter, after registering an expansion of 0.3% in the first three months of the year.
Los governors of the ECB, Meeting in the capital of Slovenia, Ljubljana, they did not commit to continuing with the cuts.