(Finance) – A few years ago, the ECB decided to review the strategy with which the inflation target was redefined at “2% symmetrical” And “We look with the same attention at the risk of it going under” this threshold, as to the (current) one that stay on top.
This was stated by the chief economist of the European Central Bank, Philip Lane speaking at the Einaudi Institute for Economics and Finance in Rome, responding to a question on the recent opinion of the IMF’s chief economist, according to which the ECB should focus more on the risk of damaging the economy too much. “Yes – added Lane – we must ensure” that the decline in inflation to the target occurs in a “sustainable” manner.
According to the latest estimates formulated by ECB technicians, which date back to mid-December, average inflation in the euro area “is expected at the objective levelor around 2025 and 2026.”
Given that it remains to be seen how much of the monetary tightening already implemented by the ECB still needs to be transmitted to the real economy, the institution’s expectation is that this will be completed this year and that “there will be no further monetary tightening in 2025”.
As for the attacks by Houthi guerrillas on ships in the Red Sea “they have caused a drastic drop in maritime traffic in the Suez Canal, and a consequent increase in the route that rounds the Cape of Good Hope, have increased transport costso, but so far the impact on consumer prices in the euro area and on oil has been limited”Lane said.