Mario Draghi says euro area not overheating
By Alexander Bueso
Date: Thursday 09 Jun 2022
(Sharecast News) - Mario Draghi appeared to caution on Thursday against moving too quickly on tightening monetary policy.
Speaking at the annual ministerial meeting of the Organisation for Economic Cooperation and Development, the former European Central Bank chief said that: "In the European Union, rising inflation is not wholly the sign of overheating, but largely the result of a series of supply shocks."
According to Bloomberg, Draghi, who had since become Prime Minister of Italy, also highlighted how core inflation was running at around half the 8.1% year-on-year pace of headline consumer prices in May.
While "significant", that jump "was much less than in the US", he added.
Draghi also pointed to unemployment in the euro area at just below 7.0% and consumption still beneath its pre-Covid 19 levels as indicative of spare capacity that still remained to be absorbed in the economy.
His remarks came just before the ECB was set to announce its next policy decision at 1245 GMT.
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