MILAN (Reuters) – The European Central Bank’s (ECB) forecast for inflation, which sees it fall below 2% in 2023 and 2024, is subject to downside risks, not just upside, a said Ignazio Visco, one of the members of the Board of Governors of the institution, in an interview published on Thursday.
The ECB announced two weeks ago that it had raised its forecast for price developments in the euro zone, above its target of 2% for this year and next year but below for the following two years.
Several members of the Governing Council, however, questioned these projections during the monetary policy meeting, judging that they underestimated the risk of keeping inflation above target.
“The (inflation) forecasts below 2% in 2023-2024 are of course subject to downside as well as upside risks,” Ignazio Visco, Governor of the Bank of Italy, told La Stampa daily.
He also said that the impact of the Omicron variant of the coronavirus on the euro area economy was not yet determined.
Regarding the European Stability Pact, he considered that the long-term sustainability of the budgets of the Member States as well as of the euro area as a whole was a key factor and said he was in favor of the creation of a post of Minister of Justice. Economy of the euro zone or the Union.
(Sara Rossi report, French version Marc Angrand, edited by Matthieu Protard)
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