Joachim Nagel, the President of the German Central Bank, addressed the G20 finance ministers and central bank governors (FMCBGs) meeting in Gandhinagar on Tuesday (July 18). He said he anticipated of a 25 basis point hike by the European Central Bank (ECB) in July, against the backdrop of a complex global economic landscape marked by geopolitical tensions and surging inflation.
Nagel addressed the challenges faced by the global economy, acknowledging the ongoing complexities arising from geopolitical conflicts, particularly the unprovoked war initiated by Russia against Ukraine. Many G20 nations condemned Russia's actions during the meeting, adding to the difficulties in finding consensus on various economic issues.
The primary concern on Nagel's radar was inflation, which has remained stubbornly high. He emphasised the ECB's commitment to address inflationary pressures by raising interest rates. The ECB has already implemented eight rate hikes in the euro system, and Nagel anticipates another 25 basis point increase at the upcoming meeting.
"The challenge I see is still on the inflation side. I think we have to do our job here. Inflation remains high, with more to come. Having already raised interest rates eight times within the euro system, our meeting next week will likely lead to another hike," Nagel stated during the G20 gathering.
In addition to addressing inflation, Nagel also stressed the importance of finding sustainable solutions to tackle the debt issues faced by certain countries. He called for concerted efforts among G20 nations to address the complexities of the current economic landscape.
During the meeting, Nagel commended India and the Reserve Bank of India (RBI) for their efforts in fostering dialogue and cooperation among different parties. He acknowledged the G20 format's crucial role in facilitating discussions on pressing economic matters.
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