European Central Bank's new committee member releases "hawkish" signal: controlling prices is still the top priority, and the fall in oil prices will ease inflation pressure.

Member of the European Central Bank's Governing Council and Governor of the Croatian National Bank, Ante Zgorman, stated that the primary task of the European Central Bank is to control inflation, and with the fall in oil prices, this task is becoming slightly easier. Zgorman, in his first public speech since taking office as Governor of the Croatian National Bank earlier this month, stated on Tuesday that the European Central Bank has already indicated readiness to act by raising borrowing costs. Despite concerns that raising interest rates may increase resistance to the difficult economic situation in the region, the rate hike is still being implemented. Zgorman told Croatian television, "We must focus on price stability," "Geopolitical developments related to the opening of the Hormuz Strait have led to a drop in oil prices. This will undoubtedly have a positive impact on inflation." As the United States and Iran push for lasting peace in the Middle East, the European Central Bank is evaluating whether to further raise interest rates on top of the hike planned for this month, the first increase since 2023. Although this conflict has stimulated inflation in Europe by raising energy prices, it has also dealt a heavy blow to the economy. If monetary policy continues to tighten, the economy may further weaken. Chief Economist of the European Central Bank, Philip Lane, stated in a speech on Tuesday that inflation will remain above the 2% target for a "considerable period of time," while Vice President Boris Vujcic stated that overall inflation and core price pressures will remain at "higher and longer" levels. In an interview published on Thursday, Governing Council member Isabel Schnabel told the media that currently, the European Central Bank will need to continue to raise interest rates to bring inflation back to target levels. When asked whether he would lean more towards the hawkish or dovish camp of the ECB, Zgorman, who succeeded Vujcic, hinted that he belongs to the former. "As an economist who grew up in Croatia during a period of severe inflation, that experience has definitely left a deep impression on me, that people must be cautious about inflation, take timely action to prevent it from affecting the most vulnerable groups," he said.