FRANKFURT, July 4 (Xinhua) -- The German central bank chief on Monday called for more drastic measures to bring down the surging inflation before it becomes entrenched.
Joachim Nagel, president of the Bundesbank, made the remarks at the Frankfurt Euro Finance Summit.
"It is clear that our current focus must be on the very high inflation rates. It is important to concentrate all of our efforts on combating this high level of inflation," Nagel said.
According to Nagel, price increases in the euro area have become a grave and "increasingly widespread" concern.
Germany posted a 8.2-percent inflation rate in June, slightly lower than May but still hovering at high levels last seen almost 50 years ago, Nagel said.
Echoing the European Central Bank, Nagel said the soaring demand and constrained supply are two main causes of the current price hikes.
According to ECB staff projections, inflation in the euro area will remain high for an extended period before it comes down to around two percent in 2024, the target level of the ECB.
Nagel cautioned against over-optimism about the forecast trajectory of inflation development in the euro area. "It may be the case that our models are not capturing the currently exceptionally strong price dynamics in full. And quite possibly, the projection will once again have to be revised upwards next time."
Citing the U.S. Federal Reserve's move to raise its policy rate to 19 percent in the early 1980s to curb the soaring inflation, Nagel believed the stubbornly high inflation has been a concern for all and warrants swift action.
"We do not want to get to that point. That is why we need to act in a timely fashion."
The ECB has terminated its bond-buying program as of the end of June and is poised to raise interest rates in July and September.
In order to bring the medium-term price outlook in line with the two percent target, Nagel called for more drastic measures to abandon accommodative monetary policy stance and increase interest rates at a faster pace.