The Governor of the Bank of Portugal, Mario Centeno, admitted that inflation should “remain high in 2022” and joined the choir of “hawkish” members of the European Central Bank (ECB) Council, stressing that “the normalization of monetary policy is necessary and required”.
Mario Centeno, during the Banca Forum, stressed that he “does nothing [face ao galopar da inflação] It is not a solution. ”
“When the post-pandemic economic recovery began, the Russian invasion of Ukraine created an economic, social and geopolitical framework of great unpredictability. For this reason, the European economy is simultaneously facing two shocks unprecedented in modern history. The prospects for economic growth and which introduce inflationary pressures,” he added. Minister of Finance.
Mario Centeno also warned of the dangers of aggressive restrictive monetary policy: “The normalization of monetary policy is necessary and required, but it must occur and conditionally, so that it is carried out in such a way that it is not in itself a phenomenon of instability.”
The governor also defended that “although inflation is expected to remain elevated during the… [este ano] There are no structural reasons for not recognizing the convergence of goals [de apontar a inflação para a meta dos 2%] In the medium term, the uncertainty can be dissipated and imbalances gradually resolved.”
The Portuguese governor’s comments come days after European Central Bank President Christine Lagarde admitted that interest rates may rise “a few weeks” after the end of the asset purchase program, at the beginning of the third quarter.
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