Abroad

12/9/2016

ECB President Draghi: “Downward Risks Still Prevail Regarding the Growth in Euro Zone”

Draghi: “We will continue with our bond-purchase program for longer periods if deemed necessary and will continue to support the economy.”

The growth rate estimate of the Bank for the Euro Zone has been 1.7% for 2017 and 1.6% for 2018

European Central Bank (ECB) President Mario Draghi made disclosures following the year-end interest rate meeting of the Bank. Draghi making the statement, “We will decrease our bond-purchases to € 60 billion starting from April 2017 and will continue until the end of December and even for longer if deemed necessary”, said that the period for bond-purchases will be extended to protect the economy.

Draghi said that there are downward risks regarding the growth rate in the Euro Zone which will continue in a similar manner but that the risk for a deflation has considerably been avoided.

ECB extended the bond-purchase stimulus program until December 2017 from March 2017 without changing the interest rates upon the last meeting in 2016, and decreased the amount of purchases. The Bank stated that it will continue with the bond-purchase stimulus program until March 2017 for a monthly amount of € 80 billion, and will purchase € 60 billion per month starting from April 2017 until December.

The growth rate estimate for the Euro Zone has been 1.7%

Revisions on the economy for years 2017 and 2018 have been disclosed after the meeting besides targets for 2019 which were vocalized for the first time. The growth estimate for 2017 has been increased to 1.7% from 1.6%. The expectation for growth in 2018 remained at a level of 1.6% whereas the estimate for 2019 has been disclosed as 1.6% as well. The estimate for the inflation rate for 2017 which was 1.2% previously has been increased to 1.3%, decreasing the expectation for 2018 to 1.5% from 1.6%. The estimate for 2019 has been disclosed as 1.7%.