Makúch: low inflation is here for the long term

The eurozone is in a period of long-term low inflation, even on the edge of deflation, and this situation isn't going to change in the next few quarters, Slovak central bank (NBS) governor and member of the Governing Council of the European Central Bank (ECB) Jozef Makúch told TASR. According to Makúch, this situation is expected to remain in place for a long time, and it isn't thought that the declared goal of 2 percent inflation will be reached any earlier than by the end of 2016. According to Eurostat, the inflation rate in the eurozone fell to minus 0.2 percent year-on-year in December. If existing measures don't prove effective, the bank is ready to adopt further ones, stated Makúch. "If the existing measures aimed at support for lending prove unsuccessful, we'll have to move towards quantitative easing", said Makúch. He believes that it's premature to talk about what this easing would entail, as the programme hasn't been put into force yet. He noted, however, that this is a matter of intensive work, and that if necessary, further measures are available. Makuch warned that very low inflation is at the same time a problem for the economy, as it doesn't develop and function as it should. According to Makúch, although the ECB's operational rules don't count directly on support for the economy, the bank is paying attention to this issue. Eurostat has stated that the monetary union's economy improved in the third quarter of 2014 by 0.2 percent quarter-on-quarter and by 0.8 percent year-on-year. "Our mandate is different from the one of the American Fed, which is supposed to support the growth of gross domestic product (GDP) directly. Despite this, the things that we have done, specifically the measures aimed at support for lending, have been adopted with the aim of strengthening economic growth in the eurozone", underlined the governor. The next session of the ECB Governing Council is scheduled for January 22.