The path is clear, with details blurry as risks persist
Last week’s rate cut undoubtedly moved us closer to our destination, but we’re not quite there yet.
Despite a few bumps along the way, the overall trend in inflation is encouraging. Inflation continues to cool toward our target.
However, I’m still waiting for unyielding confirmation that inflation remains on a downward course despite all the surrounding risks.
The next few months will be crucial.
Updated forecasts combined with incoming data about service inflation and wage development will help us navigate what will happen in April and beyond. Hence, the need to stay fully flexible, cautious and data focused.
That’s why we need to keep all options open.
Expecting a clear, long-term roadmap right now would be unrealistic. We will continue watching developments and risks closely.
Lackluster economic growth remains a concern, but this doesn’t come as a surprise. The pace of the recovery is rather disappointing.
Despite all that, it’s not a reason to panic. Many of Europe’s economic difficulties are deep-rooted and go beyond what central banks can fix with interest rates alone.
Europe needs major investment boost and innovation push to boost long-term growth. It’s vital to step up reforms and investments to drive economic recovery, both public and private.
Lower interest rates can help, but they are not enough on their own.
Our approach is clear: stay steady, adapt when necessary, and focus on keeping the economy on track.