The European Central Bank Expects to Achieve 2% Inflation Target by 2025 - Lagarde Elaborates on Future Plans
Christine Lagarde, President of the European Central Bank, recently stated that the progress in controlling inflation in the eurozone has been significant, predicting the achievement of a 2% mid-term goal by 2025. This statement has instilled confidence in the market and provided a clear guidance for the next stage of the ECB's policy direction.
Inflation Target in Sight
In a video, Lagarde stated, "In 2024, we made significant progress in reducing inflation, and we hope 2025 will be the year we achieve our strategic goals as planned." She emphasized that the ECB will continue its efforts to ensure that inflation sustainably stabilizes at the 2% level.
In recent years, inflation trends in the eurozone have been volatile. In 2024, consumer price growth briefly slowed, even falling below the target level in September. However, inflationary pressures have increased in recent months, and Lagarde warned that inflation might remain near the current level in the short term.
Rate Cuts and Economic Slowdown
With the eurozone's economic growth slowing, the ECB implemented four rate cuts in 2024, each by 25 basis points. Economists expect that by June 2025, the ECB may cut rates four more times to provide further support for economic growth.
Lagarde noted that although rate cuts boost the economy, the central bank still needs to balance the impact of monetary easing on long-term inflation control.
"Heavy Agenda": Future Key Tasks
Looking ahead, Lagarde described the tasks awaiting in 2025 as a "heavy agenda." She specifically highlighted the ECB's key focus areas:
- Monetary Policy Strategy Review: Further optimization of monetary policy tools to ensure steady economic growth and price stability goals.
- Advancement of the Digital Euro: Continuing the development and implementation of the digital euro, bringing more innovation and convenience to the eurozone's financial system.
- Eurozone Banknote Redesign: Initiating a review for redesigning banknotes. Although this project is not expected to be completed in 2025, it will be an important future direction.
Looking Ahead
Lagarde's statements not only conveyed confidence in the ECB's achievement of the 2% inflation target but also set the tone for economic policy making in the eurozone for 2025. As the rate-cut cycle progresses and structural reforms are implemented, the market will closely watch how the ECB balances stimulating the economy with controlling inflation.
In the future, progress in the ECB's monetary policy, digital transformation, and banknote design will become a focus for global economic observation, and whether the eurozone can achieve stable growth and meet the inflation target as scheduled will require further efforts and monitoring.
