ECB’s Holzmann: Future PEPP Purchases to Depend on Conditions

23 March 2021

By David Barwick – FRANKFURT (Econostream) – The most recent asset purchases under the European Central Bank’s pandemic emergency purchase programme (PEPP) do not allow conclusions to be drawn about the future, Governing Council member Robert Holzmann said on Tuesday.

At the press conference marking the presentation of the annual report of the Austrian National Bank, which he heads, Holzmann said that PEPP purchases would depend on conditions. The increase in purchases decided on March 11 reflected the goal of ‘not permitting that a too-high increase in yields hampers the recovery’, he said.

‘It is planned for PEPP to end in March 2022’, he added.

Holzmann said it was ‘highly probable’ that inflation this year would ‘be characterized by short-term increases’ as the lifting of lockdown measures resulted in higher demand, particularly in services, with supply potentially reduced.

Beyond the short term, there was no change in the outlook, he indicated. Inflation next year and the year after would remain ‘moderate, but in 2021 and the beginning of 2022 an increase, perhaps to above 2%, is quite possible’, he said.

Although the economic situation is one of ‘extremely high uncertainty’, he said, ‘[t]here is, however, reason for hope that the most serious consequences are already behind us.’