The European Central Bank (ECB) has notably revised upwards its forecasts for inflation in 2022 to 5.1% from the 3.2% forecast it made in December.
The president of the ECB, Christine Lagarde, said this Thursday at a press conference that “the Russian-Ukrainian war will have a material impact on economic activity and inflation through higher energy and commodity prices”.
Also, the war will create problems in international trade and weaken confidence, according to Lagarde.
“The magnitude of these effects will depend on how the conflict evolves, the impact of current sanctions and further possible measures.”, added the president of the ECB.
ECB staff have revised their inflation forecasts up and short-term growth forecasts down in their new projections, which incorporate the first analysis of the implications of the war in Ukraine.
The ECB now forecasts growth in 2022 of 3.7% (4.2% in December projections), in 2023 of 2.8% (2.9% in December) and in 2024 of 1.6% (without variation).
It also forecasts inflation of 2.1% in 2023 (1.8% in December), and 1.9% in 2024 (1.8%).
The ECB forecasts that inflation will stabilize in the medium term with its 2% target.
Source: Gestion
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