ECB's Visco says inflation may come down more quickly than anticipated
By Alexander Bueso
Date: Tuesday 18 Jul 2023
(Sharecast News) - Euro area inflation may come down faster than the European Central Bank's predictions, the head of Italy's monetary authority.
In an interview with Bloomberg at the G-20 finance ministers' meeting in India, Ignazio Visco, highlighted that declines in energy prices ought to make themselves felt more in core inflation over coming months and certainly by the end of 2023.
"The ECB projects that by the end of 2025 there will be 2% - my impression is that it might be faster," Visco, who sits as well on the ECB's governing council, reportedly also said.
Core consumer price inflation excludes volatile food and energy prices from its calculation and had proved more stubborn up until now.
There were risks both of doing too much in terms of interest rate hikes and doing too little, so decisions needed to take incoming information onboard.
The day before, his peers at the German central bank, Joachim Nagel, said that while he anticipated another rate hike in July, an additional move in September would be data dependent.
Core CPI was running at 5.4% year-on-year in June but the ECB anticipated a slowdown to 2.2% by the last quarter of 2025, alongside a drop in headline CPI to 2.1%.
Neither did Visco believe that a recession was a prerequisite for taming inflation.
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