HELSINKI (MNI) – The European Central Bank’s monetary policy will
ensure that commodity-related inflation pressures emanating from the
emerging markets do not become more widespread in the Eurozone economy,
ECB Governing Council member Erkki Liikanen said Thursday.
“Monetary policy ensures that inflation expectations remain firmly
anchored and that broad-based inflationary pressures do not
materialise,” Liikanen, who is governor of the Bank of Finland, said in
a statement accompanying the bank’s publication of its latest bulletin.
The Bank of Finland itself, in the same statement, said Liikanen
was “referring to the March meeting of the ECB Governing Council.”
“The risks to the inflation forecast are on the upside. They relate
to the feeding through of commodity price rises into consumer prices and
the pressures that exist for increases in indirect taxation,” the
central bank said. “The strong growth in emerging economies has boosted
demand for raw materials, driving up commodity prices. This has led to
higher inflation all over the world,” it noted.
The Bank of Finland’s new forecasts show that the global economy
and world trade will both “continue to grow fairly quickly,” but not
equally across regions. “Emerging economies’ share of the global economy
will overtake the advanced economies towards the end of the forecast
period,” Liikanen observed.
The Bank of Finland noted, however, that the risks to growth on a
global level are on the downside and that they “reflect the present
exceptional uncertainty that has been heightened by the events of recent
weeks in North Africa and Japan.”
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