Comment: The risk of economic recession in the euro zone rising rises to rise in the E

Source: Bloomberg

Author: Zoe Schneeweiss

As the economic activities of the private sector deteriorate, the risk of economic recession in the euro zone is rising, which has increased the reason for the European Central Bank to avoid interest rate cuts so far.

On Friday data, the S & P's comprehensive purchasing manager index (PMI) in December has shrunk for seventh consecutive month to 47.This is inconsistent with the slight rise in economists.Both manufacturing and service industry data have declined.

However, despite the weakness, the European Central Bank's decision makers unanimously refused to accept the discussion of the upcoming interest rate cut. In just over a year, they increased the borrowing cost of 450 basis to deal with inflation soaring.

Despite the slowdown of consumer prices, Francois Villeroy de Galhau and Estonian President Madis Muller, the central bank governor of France, all splashed cold water on investors' expectations for interest rate cuts in the first half of next year.

Muller said on Friday that this hope is "a bit optimistic" and "a bit too early."Villeroy urged "confidence and patience" to say that the European Central Bank was guided by data instead of calendar guidance.

Portuguese central bank governor Mario Centeno pointed out in Lisbon that "the date of the first interest rate cut violates the principle of dependence data."

These remarks are consistent with the point of view of the President of the European Central Bank, Christeine Ragard.She said on Thursday that officials should not be able to relax their vigilance on Thursday, and said that "fundamental" did not discuss interest rate cuts at this week's policy conference.Officials still maintain a high deposit rate of 4%unchanged.

She also announced the fourth quarter of this year's fourth quarter than PMI data, and it is expected that the output materials will increase by 0.1%.

Economists receiving Bloomberg survey are not so optimistic. They also expect the first decline since the epidemic of 20 countries in the euro zone in the second half of this year.

"These numbers depict a frustrating picture, and the euro zone economy has failed to show any obvious signs of recovery," said Cyrus de La Rubia, chief economist at Hamburg Commercial Bank."The possibility of decline in the euro zone since the third quarter is still very high."