ECB's Radev: Second-round inflation effects from Mid-East war starting

• The ECB will act decisively based on incoming data but will remain measured, with price stability as its core objective.
• The situation is increasingly complex with shifting risks (upside to inflation, downside to growth), and first signs of second-round inflation effects are being observed.
• Bulgaria's adoption of the euro is expected to bring better financing conditions, stronger investor confidence, and lower transaction costs, with a very limited and largely one-off impact on inflation (0.3-0.4 percentage points).

Dimitar Radev, Governor of the Bulgarian National Bank and ECB Governing Council member, discusses the ECB's data-driven approach to monetary policy, acknowledging increasing complexity and shifting risks but expressing confidence in achieving price stability. He highlights the first signs of second-round inflation effects from geopolitical tensions and energy prices, while also detailing the benefits and smooth transition for Bulgaria in adopting the euro.