(Bloomberg) -- The European Central Bank must ensure that its interest-rate hiking doesn’t have an “excessive” impact on the economy, according to Governing Council member Ignazio Visco.
“We now have to proceed with the right degree of graduality” in tightening monetary policy, the Bank of Italy governor said in an annual speech in Rome. “Care must be taken to prevent the intensity of its transmission from causing an excessive brake on consumption and investment. This is a tough challenge.”
Among his other comments, Visco also said:
- “The monetary policy stance must continue to be defined so as to guarantee a gradual, though not slow, return of inflation towards the target”
- “The risk of a wage-price spiral has remained low up until now”
- “Inflation is now falling both in Europe and in the United States. However, its core component, i.e. excluding food and energy, is still high”
- Market tensions: “Have largely ebbed away”
- On Italian growth: “Forecasts available to date suggest an increase of GDP of around 1% in 2023”
- On possible changes to Italy’s National Recovery and Resilience Plan agreed with the European Union in return for funds: “Any proposals for changes need to take into account the tight schedule agreed with the European authorities. Constant liaising with the Commission will be absolutely necessary, as well as useful and constructive. There is no time to lose”
- On demography: “The effects of the decrease in the population in the central age groups may be mitigated in the medium term, besides by an extension of the working age, only by an increase in net migration”
- NOTE: Meloni Grapples With Central Bank Succession as Visco Nears Exit
--With assistance from Alessandra Migliaccio.
©2023 Bloomberg L.P.
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