ECB puts oil hit to potential GDP at less than 1% over four years – Reuters
|The European Central Bank (ECB) said in a statement on Monday, a sustained rise in oil prices will reduce the eurozone's potential output by less than 1% over four years, Reuters reports.
The reduction in the bloc’s output will account for a small hit that could be further reduced by the green transition, the ECB said.
Key takeaways
“Using its own forecasting model, the ECB found that an increase of 1% in oil prices would reduce the euro area's growth potential by around -0.02% in the medium term.”
“Assuming a 40% rise in oil prices in the next four years compared to 2017-20, the ECB concluded that potential output in the euro area would be cut by just 0.8% over that period.”
"In particular, for transportation and household energy consumption, viable green alternatives exist that are far less dependent on oil.”
Market reaction
EUR/USD was last seen trading up 0.40% at 1.0258, unperturbed by the above report.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.