(Finance) – “It must be considered that the rates (of the European Central Bank, ed.) rose by 300 basis points, but starting from negative levels. In real terms (i.e. net of inflation, ed.), the rates are now around to zero therefore, frankly, there is no cause for concern. What we have to do is be careful not to overdo it“. This was stated by the governor of the Bank of Italy, Ignatius Viscoin an interview with CNBC on the sidelines of the G20 Finance in Bangalore (India).
The decision on the 50 basis point hike at the last meeting “was based on the fact that although energy prices have fallen, this has not yet been seen in non-energy prices and this means that we must be cautious. However, we must decide on the basis of the information that becomes availablewe say from time to time”.
Visco added that at the ECB meeting in March “although it has already been indicated that we could raise by 50 basis points, we still have to decide on the basis of the information available: it is really a meeting-by-meeting process“.
Looking at the economic situation, Visco underlined that “recession is not inevitable“. “We were surprised that there was a better performance than expected last summer – he explained – We considered the possibility that there was a technical recession between the end of 2022 and the beginning of 2023 and there is nothing like that. There is a substantial slowdown due to the energy price crisis and this has an effect on the real economy, on demand and on supplies”.