Budget support used to protect eurozone citizens from high food and energy costs must be limited and temporary in order to ease inflationary pressure, European Central Bank (ECB) President Christine Lagarde said on Monday. (26).
Some eurozone governments are using fiscal measures to help vulnerable households, but this raises the risk of pushing up already high budget deficits, increasing rather than dampening inflationary pressures.
“It is essential that the fiscal support used to protect these families from the impact of higher prices is temporary and focused,” Lagarde said at a parliamentary hearing in Brussels.
“This limits the risk of fueling inflationary pressures, while also easing the task of monetary policy.”
Lagarde also echoed the ECB’s latest message that interest rates will need to rise at the bank’s upcoming meetings, even if growth slows substantially.
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.