ECB’s Kažimír: Progress in Inflation Still Subject to Risks

18 December 2023

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Peter Kažimír on Monday said that there were still risks to price stability.

In a comment posted to the website of the National Bank of Slovakia, which he heads, Kažimír, said that the ECB was ‘increasingly confident that inflation will reach our target in 2025 and that we can accomplish this in a soft-landing scenario. The progress, however, is still subject to risks.’

The developments in recent months were not ‘enough to declare victory and move to the next stage’, he said. ‘We also need to see clear signs of wage moderation.’

‘For inflation to sustainably converge to our target, we must remain determined and keep the policy at current levels for as long as necessary to secure convergence towards the target’, he said.

It was a strategic choice to hold off a discussion on cutting interest rates, he said, which would allow the maintenance of ‘economic stability and support a gradual return to normality.’

‘The policy mistake of premature easing would be more significant than the risk of staying tight for too long’, he said. ‘Prudence is the key. We’re closely watching the economic indicators but will not make hasty moves.’