“Food and energy prices in the eurozone should stop rising, which will help the eurozone avoid a combination of stagnant growth and high inflation that economists fear,” said ECB President Christine Lagarde.
Inflation in Spain stood at 9.8% this month and is expected to be higher than 7% in Germany, leading the eurozone to another record high when inflation data are released on Friday.
Lagarde said the outlook for inflation was “fluid” as the ongoing war in Ukraine forced economists to constantly revise their economic forecasts.
But he expected energy and food prices, which have escalated to new highs since the Russian invasion, to stabilize, albeit at a high level.
“We know you will see higher inflation this year, there is no doubt about that,” Lagarde said.
“But we also see that some of these factors that fuel inflation today (energy and food) will remain high. But we do not anticipate that they will continue to move even higher,” he added.
She acknowledged that the eurozone was experiencing slower growth and higher inflation, but reiterated that “stagnant inflation” could be avoided, which she described as a “recession on a sustainable basis, with inflation high and continuing to rise”. ”.
The eurozone central bank said the bond-buying program, which is designed to channel funds into the financial system, would end in the summer and be followed by the first rate hike in a decade, sometime after that.
Source: Capital
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