After its monetary political fireworks in March not put monetary authorities in Europe despite the ongoing Mini-inflation initially claimed. “We have to wait the full effect of the measures”, ECB President Draghi said after the external meeting of the Fed Council in Vienna.
He reiterated, however, the European Central Bank (ECB) could be active again, should inflation and economy not as expected tighten gradually. Economists expect a longer period without any changes to the ultra loose monetary policy
For some of the measures decided in March grab only now. From 8 June to the central bank wants to buy euro-denominated corporate bonds with good credit. Excluded are issued by banks and companies that are owned by the state. The central bank is ready to buy up to 70 percent of emissions. Businesses should be encouraged to invest more. The purchases are controversial because the ECB so almost directly financing the economy.
The prospects for the development of economic growth and inflation in the euro area, the ECB assessed somewhat more optimistic than in March. Although inflation is expected to remain until well into next year far from the stability objective of the central bank of just below 2.0 percent. But thanks to the rising oil prices, inflation should come a little faster out of the cellar in the euro area
The central bank cut its inflation forecast for this year slightly to 0.2 (March forecast: 0.1). Percent up , For 2017, the monetary authorities say unchanged an increase in consumer prices by 1.3 percent advance in 2018, the ECB expects 1.6 percent inflation.
In May of this year the inflation rate in the euro area, according to preliminary figures minus 0 , 1 percent more negative. The ECB aims to beat a rate of just below 2.0 percent. Permanently low or even falling prices are considered economic risk because companies and consumers could postpone investments in expectation of falling prices
That is why the ECB made money historically cheap. The prime rate, get to the banks of fresh central bank money remains on the record low of zero percent. Unchanged at minus 0.4 percent, the central bank made on Thursday and the penalty rate, have to pay the banks when they park money at the ECB rather than lend. Until at least March 2017, the ECB also plans to put 80 billion euros per month in the purchase of government bonds and other securities.
“The beginning of March decided comprehensive package of measures supporting the momentum of economic recovery in the euro area and promoted the return of inflation” said Draghi. “Our actions are absolutely effective.” The most recent data pointed to an ongoing economic growth in the second quarter. “Looking to the future, we believe that the economic recovery will continue at a moderate but steady pace”, Draghi said.
For the current year, the ECB is now an increase of 1.6 (expected March forecast: 1.4) per cent in gross domestic product (GDP). For 2017, the central bank experts 1.7 percent Plus predict still, in 2018 the economy will therefore grow by 1.7 (1.8) percent in the euro area.
As an economic risk analyzes the Fed the Proposed referendum on United Kingdom membership of the European Union pending vote. “Britain and Europe complement each other, it would help both, if the United Kingdom in the EU remains. We as ECB believe that the UK should remain in the EU, “affirmed Draghi. The ECB has however taken precautions: “We are prepared for both cases.” The British vote on June 23 about the whereabouts of their country in the EU from. If new EU opponents, it came to Proposed referendum on United Kingdom membership of the European Union – the exit of Britain from the European Union
The Governing Council meets every year one or two times not at the headquarters of the Central Bank in Frankfurt.. In Vienna was chosen also because there the 200 anniversary of the Austrian National Bank was to be celebrated on Thursday evening.
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