European Central Bank keeps rates amid declining inflation in France

The economic situation in the Eurozone continues to evolve as inflation shows positive momentum. At the December 18, 2025 meeting, the European Central Bank decided to keep the deposit rate at 2%, considering this step an appropriate response to current market conditions.

Inflation in France Continues to Decrease

The latest data from the French National Institute of Statistics indicate a positive trend in price processes. The annual inflation rate in December 2025 was 0.7%, a noticeable decline from the November figure of 0.8%. This decrease in inflation is reflected in the slowing growth of consumer prices and signals that price pressures are gradually easing in the Eurozone’s largest economy.

Central Bank Policy Remains Stable

The ECB’s decision to keep the deposit rate unchanged reflects the leadership’s confidence in the adequacy of the current monetary stance. European Central Bank President Lagarde stated that monetary policy is in a “satisfactory state,” meaning the leadership perceives the current base as sufficient to achieve target indicators. This conservative approach allows the bank to monitor developments without rushing to make adjustments.

Eurozone Economic Growth Forecasts

Against the backdrop of stable monetary policy, the ECB has revised its economic development forecasts. The projected growth for the Eurozone has been increased to 1.4% for 2025 and set at 1.2% for the current period. These figures demonstrate moderate optimism about the economic trajectory, although the pace remains modest compared to global standards.

Further data on price dynamics in Germany will be released later, and a systematic inflation indicator for the entire Eurozone is expected on Wednesday, which will provide a more comprehensive picture of regional trends and potential implications for monetary policy.