The governor of the Bank of Greece has warned that the inflation pressures now gripping the global economy could prove harder to contain than the 2021-22 price surge, citing entrenched inflationary memory, geopolitical instability and the limits of monetary policy as compounding factors.
Giannis Stournaras said the key difference between the two episodes lies in public expectation. During the 2021-22 inflation spike, households and businesses had no recent experience of high prices and were anchored by decades of low or negative inflation.
Today, with the memory of double-digit inflation still fresh, economic actors are likely to react faster and more aggressively to any new price pressures, making the task of stabilization significantly more demanding.
Mr. Stournaras also pointed to a shift in how people perceive the drivers of inflation.
Where central bank credibility once served as the primary anchor for price expectations, geopolitical shocks — including the war in the Middle East — have convinced many citizens that economic conditions are now partly determined by forces beyond any central bank's reach.
That erosion of confidence, he warned, complicates the European Central Bank's ability to manage expectations through conventional signals alone.
The governor stressed that the ECB must move decisively if secondary effects take hold or if inflation expectations begin to drift.
He offered a degree of reassurance, however, noting that policymakers enter this period from a stronger position than in 2021, with improved tools, clearer strategy and eurozone inflation currently running close to the 2% target — leaving room to tighten rates if conditions deteriorate.
The remarks reflect growing unease among European central bankers that trade disruptions, energy volatility and prolonged regional conflicts are creating an inflation environment that is structurally more unstable than anything seen in the post-2008 era.