ECB Vice President Luis de Guindos said, “inflation is not going to be as transitory as forecast only some months ago. The assessment of risk for inflation is moderately tilted to the upside over the next 12 months.”
“And the reasons are quite simple. First, supply side bottlenecks are going to be there and are more persistent than we and many expected in the past,” de Guindos said. “And energy costs are going to remain quite elevated.”
Nevertheless, over the longer term, risks to inflation outlook are still balanced. Inflation are projected to fall back below ECB’s target of 2% in 2023 and 2024.
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