European Central Bank (ECB) Vice President Luis de Guindos has stated that the situation in the Middle East could accelerate inflation growth. In a report by Bloomberg, he mentioned that despite expecting inflation to return to the two percent target next year, there are considerable risks involved due to the geopolitical situation in the region.
According to De Guindos, factors such as an increase in company profits and upward pressure on wages in the euro area could contribute to the rise in inflation. However, actions taken by the central bank to suppress demand may not be as effective as desired. Additionally, a deteriorating global economic situation could slow down inflation, he added.
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