The European Central Bank kept its super-easy monetary policy unchanged as expected on Thursday, maintaining extraordinary stimulus to aid a tepid recovery in growth after nearly a decade in the doldrums.
Following are highlights of ECB President Mario Draghi’s comments at a post-policy meeting press conference.
MORE ON INFLATION
“There are no signs yet of a convincing upward trend in underlying inflation.”
“Headline inflation is likely to pick up further in the near term, largely reflecting movements in the annual rate of change of energy prices. However, measures of underlying inflation are expected to rise more gradually over the medium term.”
“Headline inflation has increased lately largely owing to base effects in energy prices. But underlying inflation pressures remain subdued. The Governing Council will continue to look through changes in HICP inflation if judged to be transient and to have no implication for the medium-term outlook of price stability.
“A very substantial degree of monetary accommodation is needed for euro area inflation pressures to build up and support headline inflation in the medium term. If warranted to achieve its objective the Governing Council will act by using all the instruments available within its mandate.”
“The implementation of structural reforms needs to be stepped up considerably … fiscal policies should also support the economic recovery while remaining consistent with the rules of the European Commission.”
“If warranted to achieve its objective, the Governing Council will act by using all the instruments available within its mandate. In particular, if the outlook becomes less favorable, or if financial conditions become inconsistent with further progress toward a sustained adjustment in the path of inflation we stand ready to increase our asset-purchase program in terms of size and/or duration.”
GROWTH AND REFORM
“Economic growth in the euro area is expected to be dampened by the sluggish pace of structural reform.”
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