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MNI BRIEF: EZ '23 Fiscal Policy Infl'n Impact Less Than 0.8PP


Fiscal policy measures in the euro area aimed at lowering consumer and business energy costs are set to bring inflation down less than 0.8 percentage points in 2023, lower than was expected earlier in the year on the back of falling energy prices, European Central Bank’s Vice-President Luis de Guindos said in an event in Madrid on Friday.

The expected end to the support measures will see a similar inflation reduction in 2024, e Guindos said, so it's positive that it is now below expectations, de Guindos said. In 2022 the fiscal impact of inflation was again 0.8 percentage points.

De Guindos warned governments on the temptation of thinking inflation can reduce debt burdens thanks to nominal GDP rising, noting that in the medium term could have a negative impact on debt-to-GDP ratios due to the slowdown of economic activity.

MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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