ECB hopes to hit 2% inflation target in 2025, Lagarde says

THE European Central Bank’s (ECB) 2 per cent inflation target is in sight, according to president Christine Lagarde.

“We have made significant progress in 2024 in bringing down inflation and hopefully 2025 is the year when we are on target as expected and as planned in our strategy,” she said in a video posted on X on Wednesday (Jan 1). “Of course, we will continue our efforts to ensure that inflation stabilises sustainably at that 2 per cent medium-term target.”

Euro-area consumer-price growth decelerated over the course of last year and went below the ECB’s target in September, though it has ticked up again in recent months and Lagarde has warned that it will fluctuate around its current level in the near term.

Still, that slowdown allowed policymakers to cut interest rates in four quarter-point moves and economists predict another four reductions to June.

Describing the ECB’s 2025 schedule as a “big heavy agenda”, Lagarde also highlighted the review of the central bank’s monetary policy strategy, the digital euro and the redesign of euro-area banknotes, though the latter project is not set to be completed this year. BLOOMBERG