ECB’s Elderson: Many Indicators Suggest Downside Risks to Growth Are Materialising

8 October 2024

By Marta Vilar – MADRID (Econostream) – European Central Bank Executive Board member Frank Elderson said on Tuesday that the ECB would have an ‘open mind’ in the October meeting even as downside risks to growth might already be taking materialising.

In an interview with Slovenian national daily Delo, Elderson said, ‘We will come to Slovenia with an open mind, so I am looking forward to the trip to Ljubljana and to a very genuine and open discussion.'

Many recent data suggested that downside risks to growth were already being realised, he said, so that the ECB had to evaluate whether this would have an impact on the inflation forecast.

‘What is very clear, however, is the direction of travel in the period ahead. If our projections that inflation will converge towards our 2% target in the second half of 2025 continue to be confirmed, we will continue to gradually ease our restrictive policy stance’, he said.

The pace with which the ECB delivers monetary policy easing would remain flexible and depend on new data, economic growth and the evolution of inflation, he noted.

The latest economic data were not in line with the ECB’s forecast, according to Elderson.

‘Economic growth came in at 0.2% in the second quarter, falling somewhat short of our projections. We look at a broad range of data, but we have seen that households are consuming less than anticipated and firms are less keen to invest than we had projected’, he said.

Regarding services inflation, Elderson said that this measurement was still high but would slow down in 2025 if projections were correct.