Many experts have recently stated that they expect temporary price growth in the euro area. Etienne de Callatay, head of Orcadia Asset Management, has endorsed their view. However, these statements have only deepened fears among analysts.
Earlier, the Fed sought to dispel concerns about inflation in the United States, saying that it is temporary in nature. Later on, it turned out that economists underestimated the danger of rising prices. As a result, Fed policymakers are forced to urgently raise interest rates. The European regulator also faced similar problems. In the near future, the ECB will also have to make a decision on rate hikes.
In this situation, statements about temporary inflationary pressures in Europe seem irresponsible. According to Etienne de Callataya, in 2022, EU citizens will have to put up with high prices. Orcadia Asset Management pays attention to mounting inflation amid booming energy prices. However, E. de Callatay believes that there is no need to worry as the current spike in prices is expected to be a temporary phenomenon.
According to the head of Orcadia Asset Management, earlier in the year, Europe saw a significant surge in inflation triggered by a spectacular rise in energy prices. Such a tendency will probably last a little longer than predicted. At the same time, the analyst says that inflation does not pose a serious threat to the economy. He attributes the current situation to geopolitical factors. This means that prices should stabilize since the ceiling has been reached.
Earlier, the European Commission revised up its inflation forecast in the EU for this year to 3.9% from the previous 2.5%. This is due to high prices for energy products amid their shortages. The ministry believes that energy costs are the main driver of consumer price growth in 2022.
Wholesale prices for liquefied natural gas in the European spot markets will stabilize in the second quarter of this year, experts note. The European Commission admits that gas prices will keep ticking higher throughout the whole year. LNG prices are forecast to decline only by the spring of 2023.
