ECB’s de Guindos: Could Return to 2% Inflation ‘Relatively Quickly’, Growth to Be ‘Very Modest’

22 May 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Vice President Luis de Guindos said on Thursday that inflation could return to the ECB's 2% target soon, while economic growth could turn weaker.

In a panel discussion at the VI Foro Internacional Expansión in Madrid, de Guindos said that ‘the disinflation process will continue because aside from what we forecasted in March, we have had two additional factors: the appreciation of the euro and the decline in energy prices.’

Inflation could return to the 2% symmetric target ‘relatively quickly’, according to de Guindos, who said those were ‘the good news’, with economic growth being ‘the other side of the coin.’

‘GDP data for Q1, 0.3%, was better than what we were expecting’, he said. ‘We’ll see if it has to do with distortions caused by decisions in anticipation of the uncertainty created by tariffs.’

Economic growth in Europe would be ‘very modest, very limited’, in 2025, he said.

Asked if he was now focusing more on weak growth than on inflation, he said, ‘it’s not that we focus more [on weak growth], but in our projections we take into account the evolution of aggregate demand and the exchange rate’.

Monetary policy transmission was ‘complete’ with respect to households, he said.

‘In the corporate sector, … given that banks have reservations about the future of the economy and how it can impact creditworthiness, they have restricted financial conditions to corporates despite recent easing’, he said.

Asked what he would do after his mandate as ECB Vice President came to an end in 2026, de Guindos said he did not know.

‘I am surer about what I will not do than about what I will do’, he said.