Finnish ECB chief Olli Rehn said on Tuesday that inflation in the euro zone is stabilizing more clearly at the European Central Bank’s 2% target, and that this is helping to set the stage for further reduction interest rates.
“The direction of our monetary policy is now clear,” said Olli Rehn, member of the Governing Council of the ECB, in a press release from the Bank of Finland, of which he is the governor.
“The pace and extent of rate reductions will be determined at each meeting based on the data received and in-depth analysis,” Rehn added.
Uncertainty over trade policy weighs on the short-term economic outlook and risks are to the downside, but Europe must be prepared to face a trade conflict with the United States, he added.
“Negotiation is preferable, and the EU’s negotiating position can be strengthened by demonstrating in advance that it is prepared to take countermeasures if the US threatens Europe with increased tariffs. customs,” Mr. Rehn said.
Finland’s return to economic growth will be slow in 2025 due to the uncertain outlook for the global economy, the Finnish central bank said, while reiterating its forecast for the economy to contract in 2024.
The Bank of Finland left its gross domestic product (GDP) estimate for 2024 unchanged at a contraction of 0.5%, and revised its GDP growth projection for 2025 downward to 1% from 1.1%. % in September.
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