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ECB's Constancio Says Normalizing Inflation & Unemployment Remain Difficult

Returning inflation and unemployment to normal levels continue to be difficult as the strong reflationary phase witnessed at the start of the year has not materialized despite the ongoing robust recovery in the euro area, European Central Bank Vice President Vitor Constancio said Friday.

"The ongoing cyclical recovery in the euro area is now broader and more consolidated," Constancio said at a conference in Cernobbio, Italy.

"This notwithstanding, the strong worldwide reflationary phase that seemed likely at the beginning of the year has not materialized."

"Therefore, the tasks of normalizing inflation and unemployment to acceptable levels continue to be difficult," he added.

The policymaker also noted that the growing uncertainty surrounding the strength of the world economic recovery, and of the US in particular, makes the normalization of inflation and unemployment levels in the euro area more difficult.

The ECB is set to announce its latest policy decision on September 7.

by RTT Staff Writer

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