ECB’s Visco: ‘I Think the Risks Are Balanced and Not Asymmetrical to the Upside’
30 December 2021
By David Barwick – FRANKFURT (Econostream) – Risks to inflation are balanced overall rather than being to the upside, European Central Bank Governing Council member Ignazio Visco said on Thursday.
In an interview with Italian daily La Stampa, Visco, who heads the Banca d’Italia, said that opinions among Council members differed, and conceded that HICP projections calling for below 2% in 2023 and 2024 were ‘obviously subject to both downside and upside risks.’
‘According to some of my colleagues, the latter may be prevalent’, he continued. ‘But we need to think about at least two of the underlying factors: one energy, the other related to company margins and wage growth. Now, on the latter, we have an assumption of 3% growth every year for the next three years. Let us remember that in the United States wages are rising by 4% and in Europe we are below 2%, as has been the case for the past twenty years.’
Oil prices meanwhile were already off the highs reached in November, though gas was ‘a different matter, because there is a very important geopolitical component’, he said.
‘At the moment, we do not see any second-round effects from energy prices - to which above all we owe the rise in inflation - on wages and margins, so I remain basically calm’, he said. ‘I think the risks are balanced and not asymmetrical to the upside. In any case, we are all extraordinarily careful to check month by month what the determinants of inflation are, how they move: labour market, demand, wages.’