WASHINGTON, April 14 (Reuters) – Stagflation in Europe as a result of the U.S.-Israeli war on Iran is the worst case scenario and we are not yet there, the chairman of euro zone finance ministers Kyriakos Pierrakakis said on Tuesday.
The European Commission has warned that the surge in oil, gas and fertiliser prices as a result of the closure of the Strait of Hormuz posed a risk of stagflation in Europe.
Speaking at the Semafor conference in Washington Pierrakakis said the energy price surge would reduce economic growth and increase inflation but its exact impact would depend on how long the Strtit of Hormuz would remain closed for trade.
“We’re not yet there,” he said on the stagflation scenario.
(Reporting by Jan Strupczewski)
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