By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Mário Centeno said Sunday that the ECB needed to provide additional stimulus to ensure inflation returns to 2%.
In an interview with Italian daily La Stampa, Centeno, who heads the Banco de Portugal, said that ‘[t]he level of rates must be compatible with an economy that generates stable inflation at 2%.’
As of today, that was not the case for the euro area economy, he said.
‘Supply and demand conditions are still too weak to allow a return to the target without further stimulus,’ he said.
Centeno maintained the meeting-by-meeting approach, but added that in a ‘neutral’ world, inflation and economic growth should be ‘in balance’ – which is currently not the case, given the weakness of the economy.
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