The end of the first semester of 2024 could see the optimal timing for the first ECB interest rate cut, Bank of Greece (BoG) governor Yannis Stournaras said, provided that incoming data do not, of course, change the picture.
In his speech at the Liverpool University, Stournaras said that there has been substantial progress in reducing inflation in the euro area (October 2022 inflation peaked at 10.6%, while January 2024 inflation rate stood at 2.8%). This progress has been achieved without experiencing a recession or financial instability, suggesting a “soft landing”.
According to the available data cited by Stournaras, inflation is decelerating faster compared to the December macroeconomic projections and is very likely to come very close to the 2% inflation target set in the autumn of this year.
Also, as he pointed out, the recent slight deceleration in negotiated wages is encouraging and much will depend on the evolution of profit margins, since overall cost developments, including energy costs, indicate a further easing of price pressures in the near term.
