Eurogroup President Paschal Donohoe said on Monday that high inflation will last longer than initially expected but is expected to diminish as the year progresses.

Addressing a press conference following a Eurogroup meeting in Brussels, Donohoe said he was convinced that price pressures will begin to moderate and improve later in the year.

According to the European Union's statistical arm Eurostat, inflation in the eurozone hit a new record of five percent in December 2021. Preliminary data from Eurostat showed that this was the highest level in the eurozone since recordkeeping began in 1997. It broke the previous record of 4.9 percent set in November.

Donohoe said a number of Eurogroup finance ministers have raised the issue of inflation during the meeting. "We do expect and acknowledge that the higher levels of inflation are going to be in place for a longer period of time than we would have acknowledged at other points last year but, overall, we still expect that, as we move through this year, inflationary pressures that are in place at the moment will begin to diminish," he said.

"We expect that to happen as we see supply chains in some parts of our economy continue to improve and as we see the higher level of savings that played a role in price pressures across last year begin to moderate as we go throughout the year," he added.

Donohoe also noted that the current economic recovery is strong despite many risks and challenges it continues to face. He said Europe's policy response was appropriate, adequate, well-calibrated and has contributed to mitigating the impact of the pandemic on economies.

The ministers also discussed corporate vulnerability and structural developments after the COVID-19 pandemic as well as the draft recommendation on the economic policy of the euro area for 2022. They also discussed the state of play on the strengthening of the banking union.