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The risk of a recession in the Eurozone is growing.

Peter Kazimir, governor of the central bank of Slovakia and member of the Governing Council of the European Central Bank, warned about this.

Presenting a report on financial stability in Slovakia, however, he indicated that the Central Bank plans to continue raising interest rates "despite unfavorable economic developments".

Earlier, the European Commission revealed that its forecasts point to a significant fall in gross domestic product (GDP) in 2023.

Last week, ECB Vice President Luis de Guindo suggested that inflation may have either peaked or is "very close" to it.

According to him, inflation will not increase much in the next 3 to 4 months, after which he expects it to start to decline.

Is there a risk of a currency crisis in Europe?

The ECB raised interest rates at the fastest pace in its history to combat inflation, which hit 10.7% in the euro zone in October, the highest since records began in 1997 and well above the bank's target from 2%.

Inflation has been fueled by high natural gas prices caused by gas supply cuts from Russia's war in Ukraine and by supply bottlenecks for parts and raw materials as demand recovers from restrictions imposed during the coronavirus pandemic.

In response, the central bank has raised its benchmarks by as much as two percentage points since July.


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