The euro zone is expected to see an inflation rate below the European Central BankNew forecasts indicate that the new targets of 2% in next year are achievable despite rising consumer prices.

There is intense debate about inflation within the 19-member bloc. Some people argue that the current inflationary pressures will decrease and that some loose monetary policy may be necessary. Others argue that after successive increases in inflation, the ECB must tighten monetary policy. historic monthly highsInflation

Bundesbank Governor Joachim Nagel became the second central banker in the last few days to indicate that the ECB may raise rates later this year.

The European Commission, which is the executive arm, of the EU said that inflationary pressures will likely fall next year.

In a statement, the commission noted that inflation was at an all-time high of 4.6% during the fourth quarter. It is now projected that it will peak at 4.8% by 2022. The rate will then stay above 3% for the remainder of the year.

The institution stated that inflation would fall to 2.1% as supply pressures and rising energy prices ease, but will still be below the 2% goal of the European Central Bank for 2023.

Accordingly, the Commission estimated that the annual inflation rate in the Euro area would rise to 2.6% by 2021 and 3.5% in 2022 respectively, before falling to 1.7% to 2023.

These numbers however point to the existence of an upward revision in the ECB’s own inflation forecastsAt its March meeting.

Participants in the market will closely follow the meeting to determine if the ECB will reduce its bond-buying programme or change any other terms. Any decision made by the central bank may have an enormous impact on recovery in the euro zone economies. Some of these were especially affected by the pandemic.