ECB’s Nagel: 2% Target to Be Reached by Mid-2025 ‘At the Latest’

4 December 2024

ECB’s Nagel: 2% Target to Be Reached by Mid-2025 ‘At the Latest’
Joachim Nagel, president of the German Bundesbank, at the European Central Bank Governing Council meeting in Ljubljana on October 17, 2024. Photo by Adrian Petty/ECB.

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Joachim Nagel on Wednesday said that the ECB would reach its 2% inflation target no later than the middle of next year.

In an interview with the FT, Nagel, who heads the German Bundesbank, said that the target was ‘in sight’ and would be achieved ‘by the middle of next year at the latest’.

According to the FT, Nagel said that in view of ‘still very sticky’ core inflation, he would not ‘over-emphasise’ the risk of undershooting the ECB’s target.

Nagel described 2025 as probably ‘another year of weak growth’ in Germany, whose economy would probably grow around 0.4%.

‘If you put major increases in tariffs on top of current forecasts, the economy might broadly stagnate for even longer’, and ‘even the labour market might show more noticeable weakness’, he was quoted as saying.

German authorities should give the country greater fiscal leeway to deal with structural challenges, he said. This would be a ‘very smart approach’, he said.