ECB’s Stournaras: Should Not Rule Out Larger Cuts, But Pace Should Remain Gradual

30 December 2024

ECB’s Stournaras: Should Not Rule Out Larger Cuts, But Pace Should Remain Gradual
Yannis Stournaras, governor of the Bank of Greece, at the European Central Bank forum on central banking in Sintra, Portugal, on July 2, 2024. Photo by the ECB under CC BY-NC-ND 2.0.

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Yannis Stournaras said on Monday that the ECB should maintain a gradual pace of rate cuts, but that larger moves should not be ruled out.

In an interview with Greek weekly To Vima, Stournaras, who heads the Bank of Greece, said that ‘[g]iven the heightened uncertainty, our moves should be gradual and our pace steady, continuing to be based on the available data.’

However, larger cuts should be considered if new data suggested inflation would undershoot the 2% target in the medium term, he said.

‘Looking ahead, the medium-term inflation trend suggests that there is still significant room for further monetary policy easing,’ he said.

Stournaras reiterated his concern about growth. ‘The euro area economy seems to be struggling to regain momentum,’ he said.

Economic growth could turn out to be more sluggish in the context of persistent geopolitical risks and intensifying trade pressures, he said.

‘Such a development, in turn, could push Eurozone inflation below target,’ he said.

 

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