BRUSSELS: Eurogroup President Paschal Donohoe indicated that high inflation will remain longer than predicted, but that it will decline as the year goes on.
Following a Eurogroup meeting in Brussels, Donohoe told a press conference that he expects price pressures will begin to subside and improve later this year. According to Eurostat, the statistical arm of the European Union, inflation in the eurozone reached a new high of 5% in December 2021.
According to preliminary Eurostat data, this was the highest level in the eurozone since records began in 1997. It shattered the previous high of 4.9 percent, which was recorded in November. Several Eurogroup finance ministers, according to Donohoe, mentioned the subject of inflation at the discussion.
"We do expect and acknowledge that higher levels of inflation will be in place for a longer period of time than we would have expected at other points last year," he said. "However, we still expect that inflationary pressures that are currently in place will begin to diminish as we move through this year," he added.
"We expect that to happen as supply chains in some sections of our economy continue to improve, and as greater levels of savings that contributed to price pressures last year begin to moderate as the year progresses." Donohoe also stated that the current economic recovery is solid, despite the numerous dangers and challenges that it still faces.