The Eurozone economy has shown resilience in the face of current challenges, but the risks to growth from global trade tariffs are becoming more pronounced. European Central Bank (ECB) Vice President Luis de Guindos warned that while it is difficult to predict the full impact, tariff pressures could weigh on the region’s economic growth. He stressed the importance of closely monitoring the real economy as an early indicator of the direction of inflation.
Meanwhile, ECB Executive Board Member Isabel Schnabel said that current interest rates are at “good levels” despite inflation expected to decline in the near term. She explained that the decline is due to the base effect of energy prices and the strengthening of the euro, and not due to underlying economic weakness. Inflation is expected to fall below 2% in the near term but return to that level in the medium term.
Schnabel also stressed that core inflation has remained stable around 2%, giving the ECB confidence that there is no urgent need to adjust monetary policy at this time. She also noted that consumer and corporate inflation expectations are still above target, further strengthening the justification for maintaining current interest rates.
While the eurozone has shown stability, the regional economic structure remains vulnerable to external shocks such as trade conflicts and global policy changes. In this uncertain environment, the ECB will continue to monitor economic developments closely to ensure that monetary policy remains in line with current realities and is able to contain long-term inflationary pressures.
