Our future decisions will ensure that the key ECB interest rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to our two per cent medium-term target and will be kept at those levels for as long as necessary. Tighter financing conditions are a key reason why inflation is projected to decline further towards our target, as they are expected to increasingly dampen demand. Borrowing costs have increased steeply and growth in loans is slowing. They now expect the economy to grow by 0.9 per cent in 2023, 1.5 per cent in 2024 and 1.6 per cent in 2025.Īt the same time, our past rate increases are being transmitted forcefully to financing conditions and are gradually having an impact across the economy. Staff have slightly lowered their economic growth projections for this year and next year. They now see it reaching 5.1 per cent in 2023, before it declines to 3.0 per cent in 2024 and 2.3 per cent in 2025. Staff have revised up their projections for inflation excluding energy and food, especially for this year and next year, owing to past upward surprises and the implications of the robust labour market for the speed of disinflation. Indicators of underlying price pressures remain strong, although some show tentative signs of softening. According to the June macroeconomic projections, Eurosystem staff expect headline inflation to average 5.4 per cent in 2023, 3.0 per cent in 2024 and 2.2 per cent in 2025. The rate increase today reflects our updated assessment of the inflation outlook, the dynamics of underlying inflation, and the strength of monetary policy transmission. The Governing Council therefore today decided to raise the three key ECB interest rates by 25 basis points. We are determined to ensure that inflation returns to our two per cent medium-term target in a timely manner. Inflation has been coming down but is projected to remain too high for too long. Good afternoon, the Vice-President and I welcome you to our press conference. Luis de Guindos, Vice-President of the ECBįrankfurt am Main, 15 June 2023 Jump to the transcript of the questions and answers
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