The guests and the participants mix and cross the atrium during the spring meetings of the IMF / World Bank group at the IMF headquarters in Washington, DC, on April 24, 2025.
Jim Watson | AFP | Getty Images
After years dominated by the pandemic, supply chains, energy and inflation, there was a new subject at the top of the agenda of the World Bank and spring meetings of the International Monetary Fund this year: prices.
The IMF has set the tone by launching the week with the release of its last economic forecasts, which reduced growth prospects for the WE,, United Kingdom And many Asian countries. While economists, central bankers and politicians have embarked on backstage panels and talks, many try to determine whether trade tensions between China and the United States are – Or Maybe are not – Cooling.
Political decision -makers of the European Central Bank to which CNBC spoke this week has largely stuck a tone in the head, indicating that they has seen interest rates that continue to drop And few rising risks for Euro zone inflation. However, everyone highlighted the current high levels of uncertainty, the need to continue to monitor data and high risks for growth prospects – feelings also echo by The governor of the Bank of England Andrew Bailey in his interview with CNBC THURSDAY.
These are some of the main messages from the members of the ECB this week.
Christine Lagarde, president of the European Central Bank
On inflation and monetary policy:
“We are heading towards our (inflation) objective during 2025, so that this disinflationary process is so on the right track that we are in the process of completion. But we have shocks, you know, and shocks will be amortization on GDP. It is a negative shock to demand.”
“The net impact on inflation will depend on this countermeasures are finally taken by Europe. So we have to take into account the (German) Budget pushing by defense investments, by the infrastructure fund. “”
“We have seen successive movements, you know, an ad (American prices), then a breakThen some exemptions. We must therefore be very attentive … Either we have cut, or we stop, but we will be dependent on the extreme data. “”
On market movements:
“When we had done our projections, we planned that … the dollar would appreciate it, the euro would depreciate itself. This is not what we have seen. And there were counter-intuitive movements in various categories.”
“The German market has obviously been positively shocked by the program which will soon be set up by the German government, with a commitment to defense, with a commitment to a big fund for infrastructure development.”
Klaas Knot, president of the Bank of the Netherlands
On price uncertainty:
“If I look back in the past 14 years, in the first days of the pandemic, I think it was an uncertainty comparable to what we have now.”
“In the short term, it is clear that the uncertainty created by the unpredictability of the American government's tariff actions works as a strong negative growth factor. Basically, uncertainty is like a tax without income.”
On the impact of inflation:
“In the short term, we will have lower growth. We will probably also have lower inflation. As we also see, the euro appreciates because the energy prices have also dropped. Thus, with the type of uncertainty of a short -term negative factor, it is clear that it will accelerate disinflation.”
“But in the medium term, inflation prospects are not so clear. I think there are still these negative factors. But in the medium term, you could get reprisals. You could get the disturbance of global value chains, which could also be inflationist in other parts of the world than the United States.
On a decrease in June and market prices for two other BCE rate drops in 2025:
“I am fully open -minded. I think it is too early to take a stand in June, whether it is another cut. It will depend entirely on these projections.”
“I would need to see a more structured analysis of the impact on the inflation profile in front of us, and it is only then that I can say if the market is right or if I do not.”
Robert Holzmann, governor of the Austrian National Bank
On the need to expect more data and news on prices:
“We have not seen this uncertainty now for years … Unless uncertainty is decreasing, by the right decisions, we will have to retain a certain number of our decisions, and therefore, we do not yet know in which direction monetary policy should be the best move.”
“Before looking at the data in detail, the question is what type of political decisions will be taken? Will we have price increases? Will we have strong tariff increases? Will we have reprisals by high counter-tale?”
On the drop in April rates of the ECB:
“I think there is a large consensus (on the rates). But of course, on the sidelines, people differ.”
“My assessment is at that time, it was not yet clear to what extent the countermeasures (price) were taken. Because with countermeasures in Europe, prices may have increased. Without countermeasures, prices are probably down. And for the moment, we do not yet know management.”
On the interest rate department:
“I think that if the recent noises on an arrangement (on trade) should be true, in this case, it is very likely that it is more towards the disadvantage than the increase in prices. But this can be changed with different decisions and the result, we can even imagine in (the) other direction. For the moment, no, it will be down.”
“There may be other cuts this year, but the number is still pending.”
Mārtiņš Kazaks, Governor of the Latvia Bank
On the opportunity of prices:
“With all this uncertainty and vulnerability, it is also the time for opportunities for Europe.”
“It's time for Europe to grasp all aspects of economic superpower and to become a really full -fledged political and geopolitical superpower, and this requires making all the decisions which, in the past, have not been fully carried out.”
“This requires political will, political guts to make these decisions and strengthen the European economy and assert its place in a world world.”
On the reaction of the price market:
“So far, it seems to be relatively ordered … but if we look at the spills to Europe, the financial markets work more or less, we have not seen a spreads explode or something like that.”
“But in terms, however, macro scenarios, this uncertainty is extremely high in the sense that, given the possible results, the multiple scenarios and their probabilities are very similar with the basic scenario (price).”
