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Alfred Sant casts doubt on ECB inflation forecast
Labour MEP Alfred Sant says high inflation could persist beyond what the European Central Bank is forecasting if the Ukraine war does not end shortly
4 July 2022, 11:19am
Kurt Sansone
Kurt Sansone
1 min read
The European Central Bank is forecasting that inflation will peak in 2023 and moderate back to 2% in second half of 2024 but doubts have been cast on this trajectory if the Ukraine war persists for longer
Alfred Sant says inflation in the eurozone could persist for longer than what the European Central Bank is forecasting if the Ukraine war drags on.
The Labour MEP said many are disbelieving the ECB’s forecast that eurozone inflation will peak by 2023.
Sant was addressing Andrea Enria, chairman of the ECB’s supervisory council, during an exchange of views at the European Parliament’s Economic and Financial Committee (ECON).
“If the Ukraine war does not stop shortly, persisting inflation would be quite likely,” Sant said, adding the fallout from the COVID-19 pandemic and the Russian invasion of Ukraine have triggered uncertainties about the European economy.
The ECB is predicting that inflation is set to remain very high for most of 2022, averaging 6.8%, before abating gradually from 2023 and converging to the ECB’s inflation target of 2% in the second half of 2024.
Without reacting to Sant’s claim about the scepticism on the ECB’s inflation forecast, Enria remarked that the Bank has at hand, as always and as is usual, alternative forecast scenarios.
Sant also asked whether, if inflation persists, Enria’s preference for incremental steps towards banking union would be viable.
Enria replied that though the banking union is still being fleshed out, it had already achieved quite a number of breakthroughs. He believes that despite the inflationary surge, incremental changes towards a full banking union best make sense realistically, from political and technical perspectives.
This article is part of a content series called Ewropej. This is a multi-newsroom initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. This article reflects only the author’s view. The action was co-financed by the European Union in the frame of the European Parliament's grant programme in the field of communication. The European Parliament was not involved in its preparation and is, in no case, responsible for or bound by the information or opinions expressed in the context of this action. In accordance with applicable law, the authors, interviewed people, publishers or programme broadcasters are solely responsible. The European Parliament can also not be held liable for direct or indirect damage that may result from the implementation of the action.
Kurt Sansone is Executive Editor of MaltaToday.
He was formerly deputy editor of MaltaTod...
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