ECB Chief Economist Philip Lane said in an interview with Antenna TV, there are three concerns about the Russian invasion of Ukraine, from view point of the economy, including energy, trade and uncertainty. “The war is a major negative economic issue, but the reopening of the economy gives some momentum. So this year, for example, we should expect the tourist season to be better than last year,” he said.
Lane expected that inflation might peak by “mid-year” but that depends on the war. “Most likely, with the nature of the energy shock, prices will either level off at these high prices or will start to decline”, he added. “But the momentum of inflation will slow down, so we do think that in the second half to the year, as you say, the inflation rate will come down.”
He also emphasized, “unlike the 1970s, these are a few months of high inflation rates. It is not a decade of high inflation rates, and we do think the inflation will fall later this year. So please remember: this inflation is coming from outside, it is not coming from the European economy. This is why we do think it has this special characteristic.”
Full interview here.
BoJ Kuroda: Economy to continue to recover despite rising commodity prices
BoJ Governor Haruhiko Kuroda said in the quarterly branch manager meeting, “Japan’s economy has picked up as a trend, although some weakness has been seen in part, mainly due to the impact of COVID-19.”
“As downward pressure on service consumption and the impact of supply shortages diminish, a pickup in overseas demand, accommodative monetary policy, and the government’s economic stimulus will likely help the Japanese economy recover despite being affected by rising commodity prices,” he added.
Kuroda also cautioned that “extremely high uncertainties” remain over how the crisis in Ukraine will impact commodity prices and the Japanese economy. But he also indicated that commodity inflation is unlikely to trigger a change in the central bank’s ultra-loose policy, because it wouldn’t last long.