ECB’s Nagel: Expect Euro Area Inflation to Be Back at 2% End-2024, 2025

23 January 2023

ECB’s Nagel: Expect Euro Area Inflation to Be Back at 2% End-2024, 2025
- Nagel: We will restore price stability without causing recession
- Nagel: Don’t notice monetary policy differences between Germany and France

By Xavier D’Arcy – VERDUN, France (Econostream) – European Central Bank Governing Council member Joachim Nagel on Friday predicted a return to price stability at the end of next year and the following year.

Speaking on a panel to celebrate 60 years of Franco-German friendship, Nagel, who heads the German Bundesbank, said that the experience of previous inflationary phases showed that it ‘it is important first off to get inflation back again where it belongs. In the euro area of course that’s the famed 2% inflation.’

‘And I think at the end of 2024, ’25, that will be achieved’, he continued. Price stability was ‘the most important precondition for growth to occur’, he added, as elevated inflation ‘always leads to uncertainty in an economy’ and discourages investment.

According to Nagel, the Eurozone would avoid an economic downturn.

‘We will get inflation under control in such a manner that what many fear does not occur, namely that it does not come to a recession in the euro area’, he said.

Nagel, who was speaking alongside his French counterpart, Banque de France Governor François Villeroy de Galhau, said he did not notice differences between Germany and France with respect to monetary policy.

‘We do a very good job together in the ECB Governing Council’, he said. ‘Last year we succeeded well in finding a common response to the high inflation.’