ECB's Villeroy: France Past Overall Inflation Peak; to Be Back at Around 2% Inflation by 2025

12 September 2023

By Mariana Somensi – NICOSIA (Econostream) - European Central Bank Governing Council member François Villeroy de Galhau on Tuesday said that overall inflation had passed its peak in France, confirming the effectiveness of the ECB’s monetary policy.

In an interview with Agence France Presse published on the website of the Banque de France, which he heads, Villeroy reiterated that the ECB would achieve its 2% inflation target by 2025.

'The effect of monetary policy is assured but generally takes between one to two years. It is this horizon that forms the basis of our forecast', he said. 'So I say it again: we will bring inflation back to around 2% by 2025.' 

 The increase in oil prices wouldn't undo disinflation efforts, he noted. 'Current variations in the price of oil may affect the monthly pace of inflation, but they do not call into question the underlying trend of disinflation', he said.

Regarding the real estate sector, he stated that 'it is now desirable for the production of real estate loans to stabilise and then gradually resume.'

‘[A]rtificially relaunching the sector by over-indebting borrowers would be a dangerous solution. And which could end badly for the real estate sector itself’, he said in rejecting the idea of relaxing rules applicable to credit for real estate purchases.