Eurozone inflation could continue to breach the target raised by the European Central Bank before easing back to the 2% goal next year, according to a statement.
- ECB President Christine Lagarde cited growing inflationary concerns, which could indicate that the inflation uptick could be longer than earlier anticipated.
- Lagarde noted that factors could lead to stronger price pressures than expected, but such risks remain limited so far.
- The baseline scenario is expected to remain below the target over the medium term, with inflation predicted at 2.2% this year.
- This is then expected to ease to 1.7% by next year, and 1.4% in 2023, with Lagarde reiterating that the uptick remains transitory.
- Lagarde said the central bank has “every reason” to believe that any growth in prices is not going to be a lasting factor and will be reduced in 2022.
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