Gramegna (Mes): ‘With tensions flaring up again in Iran, inflation could reach 5 per cent’

“Should both risks – a resurgence of tensions in the Middle East and a potential sharp appreciation of US assets – materialise, the euro area would experience weaker growth and higher inflation. ESM simulations indicate that, in such a severe scenario, in which both shocks were to occur simultaneously, the euro area could slip into slightly negative territory, whilst inflation could reach almost 5 per cent by the end of the year.” This was stated by the Managing Director of the European Stability Mechanism (ESM), Pierre Gramegna, at the conclusion of the Eurogroup meeting.