Thursday, 26 April 2018 20:59 WIB | FISCAL & MONETARY |Mario Draghi
Mario Draghi acknowledged that momentum weakened at the start of the year even as he signaled his confidence in the euro area™s economic health.
œIncoming information since early March points to some moderation while remaining consistent with a solid and broad-based expansion of the euro-area economy, the European Central Bank president said at a news conference in Frankfurt. œUnderlying trends continue to support our confidence that inflation will converge toward our inflation aim over medium term.
The Governing Council confirmed expectations by leaving policy unchanged earlier on Thursday. The ECB currently foresees bond-buying at a monthly 30 billion euros ($37 billion) until at least September, with rates on hold œwell past then.
The ECB™s task has been complicated by data suggesting that the euro area™s strongest growth in a decade may be faltering. As well as waning industrial output and deteriorating business confidence, the threat of a global trade war is hanging over Europe™s export-oriented economy.
Policy makers have signaled, however, that they expect growth to stabilize at a solid pace. An initial look at euro-area gross domestic product in the first quarter will come next Wednesday, with economists predicting growth of 0.5 percent -- weaker than the 0.7 percent recorded at the end of 2017, but still pointing to above-potential expansion.
In his opening statement, Draghi also repeated that policy makers will continue to monitor exchange-rate developments and their potential impact on inflation.
Companies have complained about the euro™s gain of almost 12 percent in the last year. Credit Suisse Group AG has estimated that each 10 percent gain shaves 6 percent off of European stocks™ earnings per share. Even if the single currency™s rise has petered out for now, exporters like Continental AG andVolkswagen AG flagged the exchange rate as a risk.
Draghi reaffirmed his confidence that inflation will eventually rise to the ECB™s goal of just under 2 percent, even if there are still œno convincing signs of a sustained upward trend. While wages may be finally headed higher, consumer-price growth was unexpectedly revised down to 1.3 percent in March from an initial estimate of 1.4 percent.
Source : Bloomberg