Austrian central bank chief and Hawkish ECB Governing Council member, Robert Holzmann, expressed concerns on Thursday about the European Central Bank’s (ECB) 2% inflation target, citing labor market and climate change challenges as potential hurdles. Speaking at the International Monetary Fund and World Bank meetings, Holzmann issued a warning of a possible recession if the target is met.
Holzmann also raised doubts about projection models’ ability to account for structural changes over the long term. His comments come against the backdrop of the ECB’s September forecasts, which anticipate consumer-price growth reaching the target by late 2025.
The Austrian central bank chief’s views underscore the complexities faced by the ECB in their pursuit of a steady inflation rate amidst evolving economic and environmental landscapes. The ECB’s September forecasts remain positive, but Holzmann’s warnings highlight the potential risks associated with achieving this goal.
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Source: Investing.com
