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[WARSAW] New efforts are needed to boost growth in the euro zone as inflation, even excluding energy prices, keeps undershooting the European Central Bank's target, ECB governing council member Ewald Nowotny said on Thursday.
Nowotny called for fresh measures to boost demand in the euro zone, improve its competitiveness and strengthen economic integration within the 19-country currency bloc.
Despite the ECB's 60 billion euros a month asset-purchase programme, launched in March, headline price growth in the euro zone turned negative in September, pulling further away from the ECB's inflation target of just under 2 per cent. "The ECB is using monetary policy instruments available but in my view it's quite obvious that ... additional sets of instruments are necessary," Nowotny said at an event in Warsaw. "These include structural measures ... but also on the demand side of the economy and also on the institutional factors of the economy." While the drop in euro zone inflation has often been blamed on a slump in the price of oil and other commodities, price growth excluding food and energy has also remained subdued, coming in at 0.9 per cent year-on-year in August and September. "We're clearly missing our target," Nowotny said. "The main (reason) for this is the dramatic fall in the price of oil and raw materials and that's something central banks cannot influence. But also core inflation rates are clearly below our target." He cited the need for economic, financial, fiscal and political integration in the euro zone, echoing priorities outlined by top EU officials earlier this year.