By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Dimitar Radev said on Monday that the ECB stands ready to “act decisively” while remaining “measured,” noting that there are already “some indications” of second-round effects stemming from the surge in energy prices linked to the Middle East conflict.
In an interview with CNBC, Radev, who heads the Bulgarian National Bank, said the outlook was becoming more complicated, and “the balance of risks is shifting: upward to inflation and downward to growth.”
The ECB was now “in a much better position to address challenges ahead” than during the 2022 inflation shock, he said, adding that it was “very well positioned” to fulfill its price stability mandate.
“[W]e will act decisively, based on incoming data, but we will remain measured,” he said.
Asked whether there were already signs of second-round effects from higher energy prices, Radev said that there were “some indications.”
Without pointing to specific metrics, he said that the ECB was monitoring commodities, supply bottlenecks, wage developments, inflation expectations, and the transmission of monetary policy.
The March decision to keep rates unchanged was unanimous, he said, noting that “both inaction and overreaction would be mistakes.”
Related articles: