Stable economic growth of the euro area is under the threat again. The strong euro and low inflation as well as consumer prices gathering at slowest pace – all that poses additional risks to the economy of the single currency bloc.
The ECB managing board is watching closely the inflation rate, but is still holding fire. Inertia is pertained to the upbeat outlooks which went public after another ECB’s meeting. At the briefing, Mario Draghi stated that the central bank expects the euro area’s inflation to speed up in 2015. However, even after such acceleration inflation will not be able to meet the target set by the European regulator.
The ECB’s chief does not bargain on hikes projecting lower inflation to persist for quite a long time. Perhaps, experience exchange with the Russian counterparts could remedy the situation which is now developing in the euro area. The thing is that Russia has never run into such problems since consumer prices grow by leaps and bounds, while inflation is rising steadily. Unfortunately, bearing in mind the current geological tensions, the policymakers are likely to deal with it on their own.
Mario Draghi pointed out that the ECB does not forgo unconventional measures aimed at stimulating the economy and affirms its commitment to consider all means to support the economic stability in Europe if needed. An important point to remember is that the European Central Bank left the key interest rate unchanged at the record low level of 0.25%. In the meantime, the deposit rate remained at zero, while the margin refinancing rate was kept in place at 0.75%.
