ECB’s Villeroy: Inflation Could Be Down to 4% by End-2023
4 July 2023
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Tuesday said that inflation could be down to around 4% by the end of the year.
In an interview with French regional daily L’Union, Villeroy, who heads Banque de France, said that ‘although inflation has passed its peak, it is still too high.’
‘Our aim is to bring it down to 2% by 2025’, he said. ‘That's our forecast and that's our commitment. The fall should continue from the second half of this year, with food prices in particular slowing down. We could return to inflation of around 4% by the end of 2023.’
Underlying inflation was ‘just beginning to stabilise’, he said.
The economic toll of higher interest rates had to be accepted in the interest of controlling inflation, a ‘disease that needs to be cured in time’, he said.
Putting off the remedy would only make the effort more difficult in the end, he said.
‘France will gradually emerge from inflation while avoiding recession this year and in subsequent years, barring a major external shock’, he said.