Central Bank governor Gabriel Makhlouf has said the European Central Bank (ECB) will not commit to a predetermined path on interest rates.
In an address to the Atlantic Council during IMF/World Bank week in Washington DC, Mr Makhlouf said euro zone inflation was where policymakers wanted.
“We continue to be in a good place with the disinflationary process behind us, the European economy showing resilience and inflation where we want it to be,” he said.
“We are not pre-committing to a particular rate path and will continue to determine the appropriate monetary policy stance by following a data-dependent and meeting-by-meeting approach,” he said.
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The ECB left euro zone interest rates on hold for a second straight month in September as it weighed the outlook for inflation amid a slowdown in trade and ongoing political turmoil in France.
The bank marginally raised its inflation projections for this year and next by a tenth of a percentage point suggesting price growth across for the bloc would average 2.1 per cent in 2025 and 1.7 per cent in 2026.
The move was interpreted as lessening the chance of the another rate cut in the current cycle.
The bloc is facing several challenges with political deadlock in France threatening to choke off investment and the outlook for German exports diminishing in the face of greater trade protection.
“Ireland is a small, highly open, highly globalised and very well-connected economy in an increasingly fragmented world,” Mr Makhlouf said.
“An environment of trade barriers and policy uncertainty and unpredictability has economic costs for us,” he said.
“Our analysis suggests that 15 per cent tariffs will reduce our exports to the US. But they are not prohibitive to trade, and our latest projections anticipate a slowdown from 2.9 per cent growth this year to just over 2 per cent in the coming years,” the governor said.
“This serves to highlight that while the US market is important for Ireland, it is far from our only one,” he added.
