Christine Lagarde confirms that controlling inflation is a priority for the European Central Bank. And admits recession risks have risen
European Central Bank (ECB) President Christine Lagarde said on Tuesday that interest rates will continue to rise until inflation returns to 2%, even if that implies a greater risk of a recession, she said in an interview. in the Latvian newspaper Delfi.
“Our target is an interest rate that guarantees a 2% inflation target over the medium term. Our goal is clear and we have not reached it yet,” the ECB president said, although he did not elaborate on the cost of future increases. Also in this regard, Christine Lagarde noted that the issue of a future increase in the ECB will be decided “meeting by meeting.”
The ECB president also acknowledges that the likelihood of a recession has increased, but reiterates that the central bank’s goal is related to price stability. To this end, Lagarde argues that all the tools available to the institution should be used and the most effective and appropriate ones should be used.
The ECB’s current forecasts, released in September, point to a gradual decline in inflation until 2024, from 8.1% in 2022 to 5.5% in 2023, followed by a fall to 2.3% in 2024. Growth is expected to slow to 0.9% next year. and reach 1.9% in 2024.
A more pessimistic scenario predicts “slightly higher” inflation later this year and a fall to 2.7% in 2024. Along with this scenario, the ECB also foresees reduction economy in 2023, followed by a resumption of growth next year. The next ECB economic review is scheduled for December.