The European Central Bank in the person of the governor promised solemnly to do its best within its powers to support the economic recovery in the euro area. According to the statement, the ECB has enough tools to do away with excessively low inflation in the bloc and make the figure in line with the target of 2%.
"We are confident we will deliver the close to 2%, but below 2%, objective," Mr. Draghi said. However, the ECB chief pointed out that the main goal for the regulator is to achieve the price stability, which is impossible to get without financial stability. Besides, the central bank has some experience as it has already faced the too-prolonged-low-inflation periods.
Assuming the disappointing projections on the inflation rate, opinions of most analysts converged on the possible rates cut, including the base interest rate and deposit rate, at the upcoming ECB meeting. About 90% of the polled economists expect the monetary policy easing to start in June.
Some experts are not sure that the problem will be cleared up after the inflation is 2%. For instance, Nobel Laureate Paul Krugman claimed that the inflation target set by the ECB is too low. He noted that in the time of almost zero interest rates, weak inflation might push the real interest rates higher and, as a consequence, bring down the demand.
