ECB’s Visco: Recovery Faces Considerable Downside Risks, Policy Support Should Continue

13 October 2021

By David Barwick – FRANKFURT (Econostream) – The global economic recovery is ongoing but remains subject to considerable downside risks, so policy support should continue, European Central Bank Governing Council member Ignazio Visco said Wednesday.

Speaking at a press conference following the G20 meeting during the IMF Annual Meetings, Visco said G20 finance ministers and central bankers had acknowledged ‘that the global recovery has continued at a solid pace in the last few months’ thanks to policy support and vaccination progress.

‘At the same time, the recovery remains highly uneven across countries, and there are still considerable downside risks’, he continued. ‘The pandemic continues to be a major source of risk for the global economy, also because of the possible spread of new variants of COVID-19, and vaccinations are still the first and most important response, not only for public health purposes, but from a purely economic point of view as well.’

Meeting participants agreed on the necessity of policy support ‘for as long as necessary, with the aim of addressing the consequences of the pandemic and steering the global economy toward strong, sustainable, balanced and inclusive growth’, he said.

The discussion of economic developments had concentrated on inflation, with the ‘key message’ in this regard being that high inflation was a temporary phenomenon that would ‘fade out, albeit gradually’, he said.

‘Inevitably, the widespread uncertainty surrounding the current situation requires central bank governors to monitor price dynamics closely and continue communicate monetary policies clearly’, he added.