EUROPEAN Central Bank (ECB) executive board member Piero Cipollone has warned that global turbulence could hit the eurozone, according to an interview in El Pais.
“Uncertainty may increase and this may affect the strength of the recovery, as it would jeopardise investment,” he told the Spanish paper.
“This could have an impact, especially on growth, and would obviously have an effect on inflation. If this uncertainty is prolonged, it will have an impact on the real economy.”
The ECB hasn’t cut interest rates since June and – with inflation hovering around the 2% goal – investors and most economists expect it to stay on hold through 2026.
The central bank’s latest projections see the economy expanding 1.2% this year.
“Gross domestic product has been resilient and we expect figures that could even be better than forecast,” Cipollone said.
“Inflation has fluctuated around our target in recent months.”
In the interview, the central banker highlighted that “the good news, from my point of view, is that the latest revision was essentially due to investment”.
“This is not only a component of demand, but also a component on the supply side: it means investment in greater productive capacity, which should be reflected in faster growth without jeopardising price stability,” he said. — Bloomberg
Daniel Basteiro writes for Bloomberg. The views expressed here are the writer’s own.
