October 5, 2021

This is the ECB Policy Maker's Comment on the European Zone Economy

 Speeches from European Central Bank (ECB) policymaker Luis de Guindos graced European session trading, where he expects the European Zone to achieve strong economic growth in the third quarter of 2021.

Even so, recent indicators show growth is seen to be losing strength following supply shortages, higher energy costs and barriers affecting manufacturing.

When mentioning the delta variant that is a concern around the world, de Guindos said the effect was not as expected. Yet, it still poses a threat to public health and a major impact on economic prospects causing supply chain disruptions.

In addition, he also commented on inflation by saying that consumer prices are likely to continue to rise in the next 2 to 3 months. The problem of supply disruptions is a component that has a structural effect on inflation.

However, it is expected to fall again next year when the factors driving up inflation fade again.

Additionally, de Guindos said that the central bank will decide on an alternative to its emergency bond purchase program (PEPP) in December if needed.

The statement slightly supported the euro to trade stronger at 1.16100 during the European session, besides also being influenced by the depreciation recorded by the US dollar.