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13 Mar 2014
ECB Monthly Report: Rates to stay low on subdued outlook for inflation
FXStreet (Łódź) - In the March ECB Monthly Report the Governing Council reiterated that interest rates would be kept low for an extended period of time, based on the subdued outlook for inflation stemming from a continued weakness of the Eurozone economy and the “high degree of unutilised capacity and subdued money and credit creation.”
Still, the moderate economic recovery in the area is advancing in line with the ECB's projections and the current outlook for prices and growth confirms the need for keeping the accommodative monetary policy stance for as long as necessary, to boost the recovery.
The Governing Council expects “annual HICP inflation at 1.0% in 2014, 1.3% in 2015 and 1.5% in 2016,” adding that “in the last quarter of 2016, annual HICP inflation is projected to be 1.7%.” GDP growth is seen at 2% in 2014, 1.5% in 2015 and 1.8% in 2016.
Finally, the report urges EU Member States' national governments to increase efforts in order to “put high government debt ratios on a downward trajectory over the medium term” through implementing fiscal strategies in line with the Stability and Growth Pact. They should also continue with structural reforms aimed at reducing unemployment in the area.
Still, the moderate economic recovery in the area is advancing in line with the ECB's projections and the current outlook for prices and growth confirms the need for keeping the accommodative monetary policy stance for as long as necessary, to boost the recovery.
The Governing Council expects “annual HICP inflation at 1.0% in 2014, 1.3% in 2015 and 1.5% in 2016,” adding that “in the last quarter of 2016, annual HICP inflation is projected to be 1.7%.” GDP growth is seen at 2% in 2014, 1.5% in 2015 and 1.8% in 2016.
Finally, the report urges EU Member States' national governments to increase efforts in order to “put high government debt ratios on a downward trajectory over the medium term” through implementing fiscal strategies in line with the Stability and Growth Pact. They should also continue with structural reforms aimed at reducing unemployment in the area.