Kazimir urged for a prudent debate on the reinvestment of the Pandemic Emergency Purchase Programme (PEPP) without disrupting the rhythm of balance sheet reduction. He highlighted that such discussions should be based on concrete data and economic indicators.
He identified a downward trend in inflation, noting significant economic repercussions from previous rate hikes. These include tightening financing conditions and diminishing investment demand, which have had a substantial impact on production and overall economic growth.
Underscoring the urgency to address inflation, Kazimir pointed out the need for swift action to prevent further economic slowdown. His observations indirectly reference views held by his ECB colleague, Guindos, particularly on the transmission of these factors to the broader economy.
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Source: Economy - investing.com
