Free Trial

MNI BRIEF: Fiscal Support Adds 0.8% To Inflation Over 5Yrs-ECB

(MNI) LONDON

EU fiscal support in response to the energy crisis will add 0.8% to eurozone HICP inflation over the period 2020-25, while adding around 2.5% to GDP, according to the latest ECB Economic Bulletin.

Measures are likely to amount to a gross stimulus equivalent to 2% of GDP in both 2022 and 2023, with only 12% of discretionary fiscal measures targeting vulnerable households and firms directly affected by rising gas and electricity prices.

Support of around 0.5% GDP will remain embedded even if, as expected, that support is largely withdrawn over the course of 2024, with additional withdrawal in 2025 bringing the estimated budget cost down to 0.2% of GDP. The euro area debt to GDP ratio is anticipated to fall by close to 5% overall in 2024.

MNI London Bureau | +44 20 3983 7894 | luke.heighton@marketnews.com
MNI London Bureau | +44 20 3983 7894 | luke.heighton@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.