"The combination of high inflation and low or zero growth... is one of those rare scenarios in developed countries that only a significant external shock can trigger."
"We don't see stagflation, but we are moving in that direction; how far we will go is very difficult to predict."
"Neither Brussels nor Frankfurt wants to downplay the current risks after having underestimated... the inflationary crisis of 2021 and 2022."
Stagflation, characterized by high inflation and low growth, is becoming a concern again, reminiscent of the 1970s oil crisis. External shocks, such as wars, can trigger this scenario, leading to rising costs without curbing economic activity. Recent warnings from European officials indicate a potential stagflation crisis, with uncertainty and volatility in the economic outlook. Market reactions to political statements further complicate the situation, as previous inflationary crises were underestimated. The current economic climate is marked by weak consumption and investment, contributing to the risk of stagnation.
Read at english.elpais.com
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