European Central Bank Governing Council member Ante Zigman stated that the central bank's primary task is to control inflation, a mission that is becoming slightly easier as oil prices decline.
Zigman delivered his first public remarks on Tuesday since assuming his role as Governor of the Croatian National Bank this month. He indicated that the ECB has demonstrated its readiness to act by raising borrowing costs. This rate hike was implemented amid concerns it could increase headwinds for the struggling eurozone economy.
In an interview with Croatian television, Zigman said, "We must focus on price stability. Geopolitical developments related to the opening of the Strait of Hormuz have led to a decline in oil prices. This will certainly have a positive impact on inflation."
As the United States and Iran work towards a lasting peace in the Middle East, the ECB is evaluating whether to take further action following this month's rate increase, which was the first since 2023. While the conflict in the Middle East has exacerbated European inflation by pushing up energy prices, it is also weighing on the economy; a sustained tightening of monetary policy could lead to further economic weakness.
ECB Chief Economist Philip Lane said on Tuesday that inflation would hover above the 2% target for a "considerable period of time." Vice President Boris Vujcic stated that both overall and underlying price pressures would remain "higher for longer."
When asked whether he would lean more towards the ECB's hawkish or dovish factions, Zigman, who succeeded Vujcic, hinted that he belongs to the former camp.
He said, "As an economist who grew up during Croatia's period of hyperinflation, that experience truly left an impression on me. It made me realize that we must be cautious about inflation and must act in a timely manner to prevent it from affecting the most vulnerable groups."
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