The annual consumer inflation rate (CPI) in the euro zone should only slow down to the official target of 2% pursued by the European Central Bank (ECB) in the second half of 2025, according to the monthly economic bulletin released by the ECB this Thursday ( 12).
Eurosystem specialists project that the bloc’s average inflation will weaken from 8.4% in 2022 to 6.3% in 2023, informs the document. Further reductions in average inflation are forecast for 2024, to 3.4%, and 2025, to 2.3%.
In December, the eurozone’s annual CPI stood at 9.2%, according to Eurostat’s preliminary estimate, losing steam from November’s 10.1% rate and after reaching an all-time high of 10.6% in October.
In the bulletin, the ECB assesses that the risks to the inflation outlook are mainly upward. As for the economic perspective, the risks are negative, especially in the short term, says the monetary authority.
Also in the document, the ECB reaffirms that interest rates still need to rise significantly and at a constant pace “to sufficiently restrictive levels to guarantee the timely return of inflation to the medium-term target of 2%”.
Last year, the ECB raised its benchmark rate by 2.5 percentage points as inflation in the euro zone hit record highs amid Russia’s war in Ukraine, which helped boost energy prices.
Source: CNN Brasil
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