ECB economists say current inflation risks more balanced than 2022 in World Economy News 04/06/2026 Senior European Central Bank economists said Wednesday that the current inflation shock in the euro zone may not necessarily be less severe than the 2022 episode, as several initial conditions point to greater inflationary risks. Euro zone inflation rose to 3.2% last month, exceeding the 2% target. The increase followed a surge in energy prices driven by the war in Iran, with effects now spreading to the broader economy through services. The jump in inflation has made a small rate increase later this month almost certain. Few expect aggressive policy tightening afterward, as current conditions are not seen as favorable for rapid price growth acceleration. The blog post authors, including Óscar Arce, head of the ECB’s economics directorate, supported this view but noted risks were more balanced. The blog does not necessarily represent the ECB’s official position. “Some features point towards lower inflationary risks now than they did in 2022,” the post stated. “That said, a number of other initial conditions flag larger inflationary risks now compared with 2022.” The current price shock mainly affects oil, while gas prices have remained much lower, keeping electricity prices down. The expansion of renewable energy production has also helped contain costs. Household demand is weaker, the labor market is softer, and both fiscal and monetary policies are tighter than at the start of the previous shock. These factors all limit the potential for an inflation surge. The current shock is more global in nature than the 2022 episode, raising the risk of strong non-linear amplification if it proves larger, broader or more persistent than expected. “A global shock has larger indirect effects on inflation, as cost pressures build more broadly along global value chains,” the authors wrote. “This, in turn, causes import prices to rise more sharply and the energy price shock to trans