European Central Bank Governing Council member Ewald Nowotny said new measures are required to achieve price stability as core inflation is clearly below the target.
“The ECB is using the monetary policy instruments available – but it is quite obvious that in the current macroeconomic situation additional sets of instruments are necessary,” Nowotny who also heads Austria’s central bank, said at a conference in Warsaw.
“These include structural measures,” he added.
For 2015, inflation is forecast to be 0.1 percent and 1.1 percent next year. “So we will clearly miss our target,” he said. The main reason for lower inflation is dramatic fall in oil and raw material prices.
But core inflation is also clearly below the target, he observed. “It is obvious that under such a constellation we need stronger economic growth, which should help reduce unemployment and bring us closer to our goal of price stability,” said Nowotny.
Further, the banker said the biggest two challenges EU and the EMU have to tackle today are anemic growth and uncertainties related to the future of EMU and also of the EU.
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