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Will inflation go down in Europe? This is what the Central Bank believes

On December 3, the Central Bank of Europe projects that inflation will fall in the region throughout 2022. The comment was made by Christine Lagarde, the president of the entity, at the Reuters Global Virtual Conference.

Christine Lagarde said that Europe “is definitely different from the United States”, where inflation is projected to continue . As reported by CriptoNoticias, Jerome Powell, the president of the country’s Federal Reserve (FED), declared this week that the price increase is not something temporary in its territory.

While the Federal Reserve The United States warns that inflation will continue indefinitely in the country, the Central Bank of Europe foresees an opposite scenario for its continent. The entity revealed that current inflation in Europe is the highest in history, being 4.9%, while in the United States it reached 6.2% .

Europe has never had inflation as high as in 2021, which reached 4.9%. Source: sdw.ecb.europa.eu.

“We firmly believe and I am sure that inflation will decrease in 2022,” declared Christine Lagarde on behalf of Europe. And he added that it is very difficult to see a rise in prices in the region during the next year and he promised to act when necessary to maintain price stability.

I see inflation as a hump and a hump eventually declines. We believe that we are at the highest level of that hump.

Christine Lagarde, President of the Central Bank of Europe .

According to the data published by the Central Bank of Europe, which only considers basic goods so it is a scaled-down analysis of reality, inflation was affected mainly by the cost of transport and services such as energy . Each of these increased in the year by 10.6% and 8% respectively.

Regarding the latter, Lagarde mentioned: «We have reasons to anticipate that by the end of 2022 the cost of energy will have substantially lowered ‘in Europe. Although he did not disclose his reasons.

To achieve the objective of lowering inflation, it is also necessary to maintain the reduction in the printing of euros. The entity states that in Europe the issuance of banknotes decreased since December 2020 . This differs from the United States, where it has not stopped growing since the hit of the pandemic.

The issue of euros has decreased since December 2020, unlike that of dollars, which is still increasing. Source: sdw.ecb.europa.eu.

Inflation drives the purchase of cryptocurrencies

Concern about global inflation Widespread has incentivized the purchase of cryptocurrencies, such as bitcoin , according to a recent Blockdata report. As reported by CriptoNoticias, this happens even in places with a fairly stable economy compared to Latin American countries, such as Argentina and Venezuela, where the price increase is higher than one digit.

The president of the Central Bank of Europe stated that care should be taken with investing in bitcoin and other cryptocurrencies, because they are highly speculative assets. On this, he also reaffirmed the plans to launch a digital euro currency that works at the same time as the official one.

He also added that, taking into account that it is December, they want to clarify what they project for next year. Having clarified that, he stated that the Central Bank of Europe remains “extremely attentive to inflation” and adds that its index is its “compass to get to your destination”.

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Sandra Loyd
Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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