MNI BRIEF: Inflation Fight Will Boost Growth -ECB's De Guindos

Slowing inflation in the second half of 2023 could cut the length of any economic downturn in coming quarters, European Central Bank Vice President Luis de Guindos said in an interview published Tuesday. While accepting that containing price increases would not be the only factor that would help boost growth, de Guindos told Politico that "to improve the growth outlook, it is very important to tackle inflation."

There is no trade off between growth and inflation, as the factors behind higher prices "are the same as those behind the slowing down of the economy," De Guindos said.

He downplayed recent suggestions by eurozone political leaders for the ECB to slow its pace of tightening, saying "they are fully entitled to speak their minds" but stressed that the central bank's mandate for price stability is clear, echoing recent comments from follow Governing Council members (MNI INTERVIEW: ECB Likely To Keep Hiking Beyond March – Kazaks). Although suggesting further hikes were likely and that a form of passive QT could begin in 2023, he would not be drawn on a terminal -- or end -- rate target for policymakers.