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Eurozone: Inflation differentials to remain substantial – Rabobank

Rabobank economists forecast that inflation differentials between euro area Member States remain substantial.

Inflation differentials likely to hold

“Despite some convergence since the summer of 2022, inflation differentials between eurozone member states remain substantial. Looking ahead, further convergence can be expected as energy price swings weaken, energy price spillovers fade and the effect of government support measures lessens. However, larger-than-usual core inflation disparities are likely to take longer to resolve.”

Due to the wide range of inflation rates across the bloc, a one-size-fits-all monetary policy is even less likely than in ‘normal’ times.. So, in due course, the ECB may have more to worry about than historically high inflation itself.”

Source: Fx Street

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