(Bloomberg) — The European Central Bank will continue to lower borrowing costs in 2025, according to Governing Council member Boris Vujcic.
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“The direction is clear, it is a continuation of the direction from 2024, and that is the further reduction of interest rates,” the head of the Croatian central bank told state broadcaster HRT1 in an interview on Saturday.
Last week the ECB cut the deposit rate by a quarter of a point to 3%, the fourth such move since June. Officials have indicated that more steps will follow, although the difference is in terms of how much will be needed.
“I don't know until what point” the ECB will cut rates, Vujcic said. “That will be determined by data, mainly the inflation rate, which will slow down, according to our projections, and we will see the impact of the transfer of monetary policy, and our projections.”
One point of uncertainty weighing on the outlook is the threat of tariffs after Donald Trump returns to the White House next month.
“If there is a trade war, that will be bad for growth in Europe and in the rest of the world,” Vujcic said, adding that trade wars are usually fan prices. “We hope we don't see a trade war, that won't be good for anyone.”
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