Mario Draghi: The risks remain balanced, but uncertainty is growing

September 17, 2018 8:21 pmComments Off on Mario Draghi: The risks remain balanced, but uncertainty is growingViews: 14

Mario DraghiThe risks to the economic development of the Eurozone remain balanced and growth continues to support confidence in achieving target inflation. This was stated by the Governor of the European Central Bank Mario Draghi after the decision of the Eurozone monetary regulator was announced. However, he warned of growing uncertainty about protectionism, the vulnerability of emerging markets and the volatility of financial markets.

“The Governing Council is ready to use all its instruments in an appropriate way to ensure that inflation continues to move steadily toward central bank targets”, said Mario Draghi.

The Governor of the ECB, however, stressed that the main strength of the economy continues to support the belief that a sustainable approach to inflation will continue and will persist even after the end of the asset purchasing program.

“The data broadly confirms our previous assessment of the ongoing widespread widening of the Eurozone economy and a gradual increase in inflation”, said Mario Draghi.

The Eurozone GDP, according to ECB experts, will grow by 2% in 2018, 1.8% in 2019 and 1.7% in 2020. By comparison, the previous projections were for an increase of 2.1% in 2018, 1.9% in 2019 and 1.7% in 2020. Mario Draghi explain the downward revision of the next year’s forecast with the expected lower external demand.

The ECB maintained its annual inflation forecast of 1.7% by 2020.

At today’s meeting, the ECB decided to keep the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged – 0.00%, 0.25% and -0.40% respectively. The Governing Council expects the key ECB interest rates to remain at their current level for at least a period that includes the summer of 2019 and in any case as long as necessary to ensure further sustainable convergence of inflation to levels below but close to 2% over the medium term.

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