Ukraine war may shave 0.3%-0.4% off eurozone 2022 GDP in middle scenario

European Central Bank chief economist Philip Lane told policymakers on Friday that the Russia-Ukraine was could shave 0.3%-0.4% off the eurozone GDP in the middle scenario, Reuters reported, citing people familiar with the matter.

Additional takeaways

“Presented severe scenario where GDP is cut by close to 1%.”

“The mild scenario showed no impact, now seen as unlikely.”

“These were ‘back-of-envelope’ preliminary calculations, mostly derived from commodity prices.”

Told meeting there would be a significant increase to 2022 inflation forecast.”

“Hinted at inflation below target at end of horizon.”

Market action

The shared currency stays on the back foot on Friday and the EUR/USD pair was last seen losing 0.17% on a daily basis at 1.1172.

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