A return to price stability in the Eurozone is possible, without harming the economy, believes Mr Boris Vucicmember of its Board of Directors ECBalthough as he points out, there is still some uncertainty.
“If our current predictions come true, then we’ll have one soft landing with low sacrifice rate, that is, without a recession and without a significant increase in unemployment,” said the central banker of Croatia in an interview with “We can’t be sure it will stay that way until we reach our goal, but in my view a smooth landing is still a central scenario,” he added.
At the same time, as he pointed out, the war between Israel and Hamas is a key source of uncertaintyas there is o risk of increasing energy costs. However, the extent of any impact on the Eurozone economy is “difficult to say” at the moment, he said.
“First, we need to see whether such a shock will occur or not” he noted and added: “If so, what is the nature of this shock and what is the extent of the shock? And then we will try to assess the potential impact on price developments and act accordingly.”
At the same time, he emphasized that “it is too early to think about rate cuts». “However, we must be ready for either potential rate hikes or rate cuts, depending on incoming data in 2024,” he said.