Gabriel Makhlouf: "Slack, bottlenecks, and post-pandemic inflation"

Remarks by Mr Gabriel Makhlouf, Governor of the Central Bank of Ireland, at the Dublin Economics Workshop, Dublin, 17 September 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Good afternoon

I know the Dublin Economics Workshop (DEW) has been an important forum to discuss economic and public policy issues over many years, so it's a pleasure and a privilege to address you today.

I will start by giving an overview of the outlook for the Irish and the euro area economies. I will then provide some historical context to the current inflationary dynamics we are seeing as we emerge from the pandemic. I will briefly outline some key elements of the outcome of the ECB's strategy review, in particular focusing on our revised inflation target and what the current dynamics might mean for monetary policy. Finally, I want to discuss the interaction between monetary and fiscal policy in a post-pandemic world.

The economic outlook for Ireland and the euro area

The economy today is at a curious juncture.

As with many aspects of our lives, COVID-19 continues to have a profound impact on the economy.  We see it in the labour market, in government finances and of course in inflation, the topic of today's panel.

We also see light at the end of the tunnel although there remains considerable uncertainty about the trajectory of the pandemic and its knock-on effects on the economy.