BοG Governor Stournaras estimates that the ECB will implement two more interest rate cuts in 2024

Bank of Greece Governor Yannis Stournaras highlighted the possibility that inflation in the eurozone might fall below the 2% target in an interview with Platow.de. He noted that, “new signs of weak economic activity and the high level of uncertainty are very likely to lead to inflation being lower than expected. This means there is a risk that inflation could drop below the 2% target in the medium term.”

When asked whether the European Central Bank (ECB) will proceed with a new interest rate cut in September, Stournaras said: “The decision will depend on the data. As President Lagarde has emphasized, we do not rely solely on individual data points. We consider all available information.”

Stournaras reiterated that he expects the ECB to implement two rate cuts this year, provided that disinflation continues as anticipated. He remarked, “we are on the right track. Additionally, growth is weaker than expected, which also supports the case for rate cuts.”

He expressed concern about the recovery front, stating, “if the new US administration follows through with its threat of imposing tariffs, it is likely to result in even greater fragmentation of the global economy and intensify stagflationary pressures, which is a combination of inflationary pressures and weak economic growth.”

SOURCE; ANA-MPA