Inflation ‘dependent on temporary factors’ such as energy
"The evolution of inflation, in general, is very dependent on reducing the impact of factors that remain temporary," said Mário Centeno this Monday.
The governor of the Bank of Portugal, Mario Centeno, considered on Monday that the evolution of inflation is “very dependent on reducing the impact of temporary factors”, such as energy.
“The evolution of inflation, in general, is very dependent on reducing the impact of factors that remain temporary,” Mário Centeno told journalists today at the press conference to present the Financial Stability Report, held today at the Museu do Dinheiro, in Lisbon.
Mário Centeno listed “energy, whose price fluctuation in recent weeks and in some cases in recent months, has been of reduction”.
He recalled the Eurosystem’s forecasts for inflation in the eurozone, which “show that in the medium term, at the end of the forecast horizon,” they will be “finally close” to the target set by the European Central Bank (ECB) for inflation (2%).
“The forecasts, from that point of view, are positive for what is the conduct of monetary policy,” the governor said.
On the other hand, Mário Centeno warned that “the effect of the pandemic” is still present, so “the economic and financial consequences of the pandemic will only be revealed over time”.
“We have to keep piloting these forecasts with this additional caution, and it has consequences not only for inflation, but for financial stability,” Mário Centeno said.
