The Strategist

Oxford Economics: ECB rate hike may hit eurozone GDP growth in 2023

01/12/2023 - 08:37

According to a study by the worldwide consulting firm Oxford Economics, this year's rate increase by the European Central Bank (ECB) could negatively affect GDP growth in the eurozone, the center of the European Union's economy.

Thorsten Jansen
Thorsten Jansen
Oxford Economics stated that the unprecedented sequence of rate hikes by the central bank "risks becoming a mistake of excessive belt-tightening that will hurt eurozone growth over the following 12 months."

The eurozone's current economic resilience provides the ECB with the perfect cover to continue aggressive rate hikes in the near future, especially as core inflation is unlikely to fall quickly, it said.

The European Central Bank moved to aggressively raise its rates last year amid seriously accelerating inflation. They were increased four times: at the July, September, October and December meetings of the regulator's governing council.