MILAN (Reuters) - The European economy may be able to avoid the shallow recession expected this year though the effect of higher rates will made itself felt with a lag and it is hard to gauge its impact, the head of Italian bank UniCredit said on Wednesday.
Speaking in Davos to CNBC UniCredit CEO Andrea Orcel also struck an upbeat note on credit quality, saying there had been no signs of deterioration up until December and the mood of heightened cautiousness among borrowers observed in October-November had improved since late December.
"Our view was a mild recession for this year, but since then, if we look at all the indicators we see, we probably see a risk on the upside so we're looking at something that could even be no recession. Now, there are significant risks in all of that," Orcel told CNBC.
(Reporting by Valentina Za, editing by Cristina Carlevaro)