FRANKFURT, Germany (AP) — The European Central Bank and other policymakers across Europe need to keep interest rates at current elevated levels until they're sure inflation is under control despite sluggish growth, the International Monetary Fund said Wednesday, warning against “premature celebration” as inflation declines from its peak.
Alfred Kammer, director of the IMF's Europe department, warned against “premature celebration" as he spoke to journalists in connection with the outlook.
The European Central Bank has raised its benchmark deposit rate by fully 4.5 percentage points between July 2022 and September 2023, from minus 0.5% to 4%.
If inflation falls faster than expected, it will boost consumer real income and spending and growth might improve.
But an escalation of Russia's war against Ukraine and accompanying increased sanctions and disruptions to trade could mean weaker growth.
Persons:
Alfred Kammer, Kammer, “, ”
Organizations:
European Central Bank, International Monetary Fund, ECB, IMF, Ukraine
Locations:
FRANKFURT, Germany, Europe, Washington, Israel, Gaza