An economic downturn in the region will take hold by year-end, Mario Draghi has warned

The European Union will likely plunge into recession by the end of the year, former Italian prime minister and European Central Bank (ECB) president Mario Draghi has told the Financial Times.

The Eurozone economy shrank by 0.1% in July-September compared to the previous quarter, according to a preliminary estimate by the statistics agency Eurostat.

“It is almost sure we are going to have a recession by the year-end,” the newspaper quoted Draghi as saying on Wednesday. “It is quite clear the first two quarters of next year will show that.”

The wider EU economy reportedly grew by 0.1% in the third quarter of the year, and the International Monetary Fund said earlier this week it expected broader European growth to rebound from 1.3% this year to 1.5% in 2024.

However, Draghi’s outlook on EU economic growth is “downbeat”, the FT wrote.

READ MORE: Eurozone risks recession – S&P Global data

Mario Draghi chaired the ECB in 2011-2019. He singled out the region’s low productivity, high energy costs and lack of skilled labor as weaknesses contributing to the economic slowdown. He also said that Europe has lost competitiveness to the US, China, South Korea and Japan over the past 20 years.

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