European Central Bank Governing Council Member Stournaras: Supports gradual interest rate cuts, geopolitical risks may undermine global economic growth
European Central Bank Governing Council member Yannis Stournaras stated that reducing borrowing costs should be done gradually, emphasizing that actions should be robust and based on existing data amid increasing uncertainty. He pointed out that if medium-term inflation is below the target, the possibility of significant interest rate cuts cannot be ruled out. The eurozone's economic growth is expected to be only 0.7%, and geopolitical risks and international trade pressures may further impact global economic growth and eurozone inflation
According to the Zhitong Finance APP, Yannis Stournaras, a member of the European Central Bank's Governing Council, stated that reducing borrowing costs should be "gradual."
The Governor of the Bank of Greece said in an interview: "Given the increasing uncertainty, our actions should be gradual, the pace should be steady, and continue to be based on existing data. Of course, if the upcoming data shows that medium-term inflation is below target, the possibility of a significant rate cut should not be ruled out."
Currently, the European Central Bank has cut rates four times by 25 basis points and is expected to continue cutting rates next year. Like Stournaras, most policymakers have expressed a preference for gradual rate cuts—markets typically interpret this term as a 25 basis point cut each time.
"Looking ahead, the medium-term inflation trend indicates that there is still significant room for further easing of monetary policy," the more dovish council member stated, "However, what concerns me is growth."
The Eurozone economy, composed of 20 member countries, is expected to grow only 0.7% this year, with the European Central Bank forecasting that output will grow only 1.1% by 2025.
Stournaras stated: "The Eurozone economy seems to struggle to regain momentum. Geopolitical risks remain high, and due to recent developments in the U.S. and elsewhere, international trade pressures will intensify, which may further undermine global economic growth and negatively impact the already very modest growth rate of the Eurozone economy. In turn, this development may cause Eurozone inflation to fall below target."