ECB’s Vujčić: Return to 2% Inflation Within the Next Two Years ‘Questionable’

26 May 2023

By David Barwick – DUBROVNIK, Croatia (Econostream) – The euro area may not see price stability restored within the next two years, European Central Bank Governing Council member Boris Vujčić said Friday.

In remarks opening the Dubrovnik Economic Conference of the Croatian National Bank, which he heads, Vujčić said, ‘The question of course now is how strong are underlying inflation pressures.’ Looking at food and services in particular, he said, ‘it’s questionable … if we’re going to be at 2% within the next two years.’

‘The monetary policy pass-through is there, but the pass-through is very different across the Eurozone countries’, he observed. ‘It might be a problem for a currency union if you have such a heterogeneity of the pass through of policy.’

Turning to lending and the impact of monetary tightening, Vujčić said, ‘I would say that the conclusion for me at least for the moment is still not straightforward.’

‘I would think we still need more data before we make firm conclusions’, he said.