European Central Bank Emphasizes Fight Against Inflation
Following the Eurozone's strong growth in the second quarter, ECB officials stressed that tightening measures must continue to bring inflation down to the 2 percent target.
European Central Bank Governing Council member Ante Zigman stated that despite the stronger-than-expected growth of the Eurozone economy, the fight against inflation must remain the top priority.
Inflation Priority After Growth
Ante Zigman, member of the European Central Bank Governing Council and Governor of the Croatian National Bank, drew attention to the strong growth of the Eurozone economy in the second quarter during statements to Bloomberg Television.
Zigman stated that inflation must definitely not be neglected during this period of prevailing economic optimism, warning that otherwise high inflation could ultimately endanger economic growth as well.
Target Level and Risks
It is stated that the inflation rate, which still hovers above 3 percent, must be brought down to the 2 percent target level set by the European Central Bank.
On the other hand, it is projected that potential increases in oil and natural gas prices could push inflation up to the 4 percent level in the coming months.
Market Expectations and Decision-Making Process
Following the ECB's second interest rate hike, additional tightening steps to pull inflation toward the target are being evaluated.
While markets price in at least three more hikes to the 2.5 percent deposit rate, Zigman clearly emphasized that the bank will not shape its decisions according to market expectations.