UniCredit CEO sees "shallow" recession ahead

Andrea Orcel, then UBS chief executive, leaves after attending a UK parliamentary inquiry into Libor interest rates in London January 9, 2013. REUTERS/Olivia Harris/File Photo

FRANKFURT, Sept 7 (Reuters) - UniCredit (CRDI.MI) Chief Executive Andrea Orcel said on Wednesday Italy's second biggest bank expected a "relatively shallow" recession in Europe followed by a rebound in 2024 or later.

Speaking at a financial conference in Frankfurt, Orcel said the European Central Bank (ECB) was in a difficult position having to strike the right balance between fighting inflation "without killing the economy".

Going too far would force the ECB to then reverse course, which would be damaging, Orcel said.

UniCredit expects the key rate to rise to around 2%, going above that level would hurt the economy, Orcel said.

Speaking about Italy's upcoming general elections on Sept. 25, Orcel said he expected a "centre right and not a far right" government to emerge from the vote.

At present, political risk accounts for 50-60 basis points in terms of the premium Italian 10-year bonds pay over safer German Bunds, Orcel said, adding Italy's fundamentals were strong.

Reporting by Tom Sims in Frankfurt and Valentina Za in Milan; editing by Agnieszka Flak

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