Peter Kazimir, member of the ECB Governing Council and president of the Central Bank of Slovakia, said that at a time when the energy shock shows no sign of abating and inflation is rising again, investors may not have fully taken into account the further austerity required by the ECB. “The market may still be underestimating the required policy strength,” Kazimir said in a review article published on the Slovak central bank website on Monday. “The problem is not a specific meeting or step of action, but what kind of policy path is needed to get inflation back to target and stay there.” Kazimir said that the question now is less and less whether the ECB needs further action, but rather how much effort is needed. “Last week's suspension is not the end,” he said. Kazimir warned that inflation faces upward risks, and said that a slowdown in economic growth alone may not be enough to cool down inflation. Kazimir said, “Energy prices are nearly one-fifth higher than a year ago. Costs paid by companies are rising, and weakening exchange rates are also making imported goods more expensive. Food prices are also slowly rising.” He warned that companies may bear the accumulation of costs before passing them on, and that inflation expectations may change before wider price pressures become apparent. He said, “Waiting for certainty doesn't necessarily lead to good policies. The risk of insufficient action is becoming increasingly difficult to ignore.”
Zhitongcaijing · 2d ago
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Peter Kazimir, member of the ECB Governing Council and president of the Central Bank of Slovakia, said that at a time when the energy shock shows no sign of abating and inflation is rising again, investors may not have fully taken into account the further austerity required by the ECB. “The market may still be underestimating the required policy strength,” Kazimir said in a review article published on the Slovak central bank website on Monday. “The problem is not a specific meeting or step of action, but what kind of policy path is needed to get inflation back to target and stay there.” Kazimir said that the question now is less and less whether the ECB needs further action, but rather how much effort is needed. “Last week's suspension is not the end,” he said. Kazimir warned that inflation faces upward risks, and said that a slowdown in economic growth alone may not be enough to cool down inflation. Kazimir said, “Energy prices are nearly one-fifth higher than a year ago. Costs paid by companies are rising, and weakening exchange rates are also making imported goods more expensive. Food prices are also slowly rising.” He warned that companies may bear the accumulation of costs before passing them on, and that inflation expectations may change before wider price pressures become apparent. He said, “Waiting for certainty doesn't necessarily lead to good policies. The risk of insufficient action is becoming increasingly difficult to ignore.”
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