This photo taken on July 27, 2023 shows the Euro sign in Frankfurt, Germany. [Photo/Xinhua]
BRUSSELS - The Middle East crisis has increased uncertainty and is affecting both inflation and growth in the euro area, a senior European Central Bank (ECB) official said Tuesday.
Speaking at the European Parliament's Committee on Economic and Monetary Affairs in Brussels, Philip Lane, a member of the ECB Executive Board, said the peace agreement in the Middle East was welcome, but the situation remained fragile, with risks of setbacks or renewed escalation.
"The full implications of the war for medium-term inflation and growth will depend on the intensity and duration of the energy price shock, and on the scale of its indirect and second-round effects," Lane said.
According to Lane, the war in the Middle East is weighing on economic activity. Services activity had weakened more visibly than manufacturing, while the support from precautionary inventory accumulation appeared to be fading as new orders stagnated in May.
