Euro zone recession not a foregone conclusion, ECB’s Knot says

FRANKFURT, Nov 28 (Reuters) – Euro zone economic growth may turn negative this quarter but a recession is not a given since some economic data, particularly in Germany, have surprised on the upside, European Central Bank policymaker Klaas Knot said on Monday.

“If you look at Germany, where actually the economy is doing better than then was feared, it’s not a foregone conclusion that we will get a recession,” Knot told a conference in Paris.

“We will get weaker growth, that’s for sure,” Knot, an outspoken policy hawk, said. “But we also need weaker growth to bring inflation back to target.”

Euro zone interest rates will continue to rise to tame inflation despite the growing risk of recession, European Central Bank policymaker Peter Kazimir said on Monday.

“Uncertainty and volatility on financial markets persists, and growth in interest rates will continue, in view of the need to tame inflation, despite the unfavourable economic development,” he said in the introduction of the National Bank of Slovakia’s new financial stability report.