ECB Vice-President Boris Vujčić said in an interview with Reuters on 18 September that central banks must remain cautious about the near-term productivity impact of artificial intelligence, warning against early enthusiasm that has historically overstated technological breakthroughs.
The comments came in a wide-ranging interview conducted the day before the ECB was expected to publish updated economic projections. With energy prices already running well above baseline forecasts, Vujčić stressed that the Governing Council continues to assess monetary policy on a meeting-by-meeting basis, relying on incoming data rather than forward guidance.
"Markets do what they have to do. They have to price assets," Vujčić said, acknowledging the heightened sensitivity to energy prices but cautioning that focus should not be exclusively on oil and gas. "One has to keep everything in mind and not focus on a single set of data."
The ECB official highlighted the dual role of oil and gas in euro-area inflation: oil delivers a faster pass-through into headline numbers via fuel costs, while gas exerts a more persistent effect through household utility bills and producer input costs. Although European gas storage remains below historical levels ahead of winter, Vujčić noted that gas is somewhat less marginal in driving electricity prices than in previous years, thanks to roughly 15–20% expansion in renewable capacity and heavy investment in energy efficiency across buildings and industry.
Renewables now account for 26% of final energy consumption and 50% of electricity consumption, he said. The severity of the coming winter — potentially influenced by El Niño weather disruptions — would determine whether real incomes and GDP face a larger negative shock.
On food inflation, the ECB anticipates a gradual increase peaking at 3.4% in the third quarter of 2027, reflecting the lagged pass-through of severe European droughts experienced during the summer. Agricultural supply shocks take time to reach retail prices, Vujčić added, noting the net global impact of El Niño remains complex.
The euro area economy has absorbed previous tightening surprisingly well, with lending rates for mortgages and corporate loans rising and bank funding costs pushed up by higher bond yields. Growth has been supported by frontloaded exports and stronger-than-forecast private consumption, though Vujčić warned that persistently elevated prices could erode real purchasing power and dampen underlying spending.
Long-term sovereign bond yields have climbed on higher inflation expectations, terminal-rate repricing, large fiscal deficits, record corporate bond supply, and global spillovers from other major central banks. Vujčić described part of the rise as structural and said responsible fiscal policy remains essential for long-run financial stability. The recent yield increase does not currently threaten stability, he said, pointing to a well-capitalised, liquid, and profitable banking sector.
New risks are emerging, however, including AI-related cybersecurity and operational vulnerabilities and stretched equity valuations in concentrated tech sectors where global spillover effects are likely. Should AI deliver sustained annual productivity gains of 4–5%, as some advocates claim, it would be "transformative for the entire economy" and require a fundamental rethink of monetary and fiscal policy, Vujčić said. History, he cautioned, offers multiple examples where initial technological enthusiasm proved difficult to realise. "We must wait and see whether this episode will be different."
