Editorial : Ukraine war blurring economic outlook – ECB monetary policy normalisation continues

Abstract

Russia’s cruel and senseless war in Ukraine is causing great destruction and suffering. The war’s impacts are being felt around the world, and people are having to pay higher prices for energy and food. Growth in Finland’s economy is slowing, and even a recession cannot be ruled out. Key ECB interest rates will be raised in July and a further hike is expected in September. The aim is to ensure that inflation stabilises at its 2% target over the medium term. In fiscal policy it is now time to refrain from new measures aimed at stimulating aggregate demand and instead to focus on strengthening the sustainability of Finland’s public finances.