a The Governor of the Bank of Portugal (BdP), Mario Centeno, on Monday acknowledged the stagflation scenario in the eurozone – a situation in which the economy is not growing, unemployment rises and prices are rising – in the wake of Russia’s attack on Ukraine.

“I am convinced that the momentum of growth that the economy has been following will prevail,” Centeno said in an interview. Bloombergin addition to that “A scenario close to stagflation is not outside the possibilities that we may face.”.

Centeno believes, therefore, that it is necessary to “adjust” policies for this possibility.

The term stagflation describes the period of the 1970s and early 1980s. (characterized by high oil prices) as there was high inflation (in some countries exceeding 10%), low economic growth rates and high unemployment rates. Recently, this fear has been expressed due to problems in product supply chains and rising energy prices.

The European Central Bank (ECB) said last week that Monitoring the situation in Ukraine It will take it into account when studying its monetary policy at its next meeting on March 10.

An EFE spokesperson stated that “the European Central Bank is closely monitoring the implications of the situation in Ukraine”. “At the March meeting, a comprehensive analysis of the economic outlook will be conducted. This includes recent developments in the geopolitical region,” said the ECB spokesman.

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