Inflation too high, European Central Bank committed to containing it
Jan 20, 2023
Davos [Switzerland], January 20 : European Central Bank President Christine Lagarde said inflation is too high and reiterated the central bank's determination to bring it back to 2 per cent.
"Inflation, by all accounts, however you look at it, is way too high. Our determination at the ECB is to bring it back to 2% in a timely manner, and we are taking all the measures that we have to take in order to do that," Lagarde said speaking at the ongoing five-day World Economic Forum's annual meeting.
The ECB chief was speaking at a session 'Finding Europe's New Growth,' Thursday (local time).
While saying the central bank had already increased interest rates by 250 basis points, Lagarde said it shall "stay the course" until such time when monetary policy moved into "restrictive territory" for long enough so that the inflation can return to 2 per cent in a timely manner.
Further, on the employment side, she said while the inflation struggle looks set to continue, the European employment figures are positive and the job market in Europe has never been as vibrant as it is now.
"The job market in Europe has never been as vibrant as it is now. The unemployment number is rock bottom compared with what we've had in the last 20 years," she said, whose transcripts were available on the WEF's website.
Of the economists surveyed between November and December 2022 by WEF for 'Chief Economists Outlook: January 2023' report, 100 per cent of the respondents said they expected growth in Europe to be either "weak" or "very weak."
"What we are seeing at the moment is clearly an activity that is declining compared with an excellent 2022, where growth was 3.4 per cent, to growth projections that we have for the full 2023 of 0.5 per cent. So, it's not a brilliant year, but it is a lot better than what we had feared," Lagarde said.
Lagarde also spoke about Europe's green and digital transition
"We know that the financing for that is going to be phenomenal. According to the Commission numbers, it's half a trillion dollars that will be needed from now until 2030 in order to move fast in those steps that will give us more independence, less vulnerability towards the flows of this world," she noted.
