ECB’s Villeroy Sees Inflation Peaking in 1H 2023 and Halving by Year-End

9 March 2023

By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau said on Thursday that inflation was approaching its peak in the first half of this year.

Speaking to French radio station France Info, Villeroy, who heads the Banque de France, said that ‘the peak is approaching, but inflation is too high in France today, as it is in Europe.’

‘The peak is for this first half of the year’, he predicted, adding that ‘inflation will come down by June … we estimate that it should be divided by two by the end of the year, but it will still be too much.’

‘We will bring inflation down to 2%, which is our target, by the end of 2024, the end of 2025’, he said. ‘This is not just a forecast we are making but a commitment.’

He said that ‘lower energy prices will contribute significantly to lower inflation’ in the immediate term, and ‘food prices should also start to come down by the end of the year.’

The fiscal measures taken by the French government ‘explain why inflation is lower in France than elsewhere in Europe’, he said.

Services inflation was ‘much lower, and it is likely to be more persistent’, he said. This area was ‘where the interest rate weapon will be more effective.’

‘A more generalised inflation is what we see today, it should not be more persistent’, he warned.