Interview with Luis de Guindos, Vice-President of the ECB, conducted by María Jesús Pérez, John Müller and Daniel Caballero

25 June 2023

The ECB’s greatest concern, its greatest challenge, is inflation. What can be done to overcome this crisis?

Last week we published our growth and inflation projections. Moderate growth is expected of below 1% this year and around 1.5% the next two years, with risks tilted to the downside. Monetary policy measures are starting to have an impact on financing conditions. The contraction in credit will pass through to the real economy. In turn, dampening demand will lower inflation. Our projections show that headline inflation in the euro area is clearly declining. We expect it to average 5.4% this year, 3% next year and to be slightly above 2% in 2025. However, underlying inflation (stripping out energy and food) is projected to reach more than 5% this year, mainly driven by unit labour costs. The labour market is robust and, although wage growth…