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Market Analysis

ECB's Rehn anticipates euro area inflation steady at 2% during 2025
Amos Simanungkalit · 28.8K Views

15

 

The inflation rate in the euro area is expected to stabilize at the European Central Bank's (ECB) target of 2% by 2025, according to Finnish ECB policymaker Olli Rehn, who spoke on Tuesday.

Rehn stated, "The direction of monetary policy is clear: we have started to cut interest rates, and our monetary policy stance is becoming less restrictive." He emphasized that the ECB's governing council will determine the pace and extent of future rate cuts during each meeting.

As the head of the Bank of Finland, Rehn cautioned that while a soft landing for the euro area's economy is anticipated, it could still lead to a recession if several negative growth risks materialize simultaneously.

He highlighted the need for Europe to enhance productivity, noting that rising energy costs due to Russia's invasion of Ukraine have adversely affected industrial output in the region. "Without significant reforms, a more sustained decline in manufacturing could jeopardize the euro area's competitiveness," he warned.

 

 

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.

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