The European Central Bank (ECB) decided this Thursday to increase its main interest rates again by 0.50 percentage points, to combat inflation, despite the turbulence affecting the banking sector in the euro zone in recent days.
The interest rates of the issuing institution are now in a range between 3% and 3.75%. He ECB However, it withdrew the reference, used in previous communications, about the need to continue increasing rates in a “significant” way.
The ECB pointed out that the Eurozone banking sector “is resilient, with strong capital and liquidity positions” and that in any case, the ECB’s policy toolkit is “fully equipped to provide liquidity support to the eurozone financial system if necessary and to preserve the smooth transmission of monetary policy”.
In addition, the economic projections were updated. Inflation is expected to reach an average of 5.3% in 2023, 2.9% in 2024 and 2.1% in 2025. While core prices -that is, without volatile elements such as food and energy, they will remain strong and above the estimate in December, with 4.6% in 2023, but will drop to 2.5% in 2024 and 2.2% in 2025.
Meanwhile, for growth in 2023, they have been revised upwards to an average of 1.0% as a result of both the fall in energy prices and the greater resilience of the economy in the face of the challenging international environment. Followed by a rebound in 2024 to 1.6%, the same figure as for 2025.
AFP and Financial Newspaper
