European Central Bank policymakers should remain vigilant as consumer price growth is projected to slow to 2% by the end of next year, according to Bundesbank President Joachim Nagel. Speaking at the central bank's open day in Frankfurt, Nagel emphasized the importance of addressing inflation, despite external factors like energy prices being beyond the central bank's control. He expressed confidence that the inflation target could be achieved by the end of 2025, following a recent interest rate cut by the European Central Bank. However, he acknowledged that Germany's economy is facing significant challenges, including an aging population and potential stagnation in growth.
Former ECB President Mario Draghi has warned that Europe is undergoing a 'slow-motion agony' due to years of economic neglect, highlighting the need for additional annual investments of up to 800 billion euros to rejuvenate the continent's economy. He pointed out that Europe can no longer depend on previous supports like strong global demand and cheap energy, indicating a shift in economic dynamics. With Germany's economy shrinking unexpectedly in the second quarter, concerns about the future remain, particularly in light of troubling developments in the auto industry.
