Friday 25 April 2014
Advertise  |  Subscribe  |  Register  | 

Close

About cookies: we use cookies to support features like login and sharing articles. Keep cookies enabled to enjoy the full site experience. By browsing our site with cookies enabled, you are agreeing to their use. Review our cookies information for more details.

ECB cuts growth forecast

By Paul Dallison  -  06.12.2012 / 16:12 CET
Main interest rate on hold at historic low.
The European Central Bank has cut its eurozone economic forecasts for this year and next year, and warned of difficult times ahead for the single currency.  

Mario Draghi, the president of the ECB, said that the 17-nation bloc's economy is expected to shrink by 0.5% this year, although he predicted some signs of recovery in late 2013.  

“Weak activity is expected to extend into next year,” said Draghi after a meeting of the ECB governing council at which it was decided to keep the main interest rate at 0.75%, a record low. He said that the governing council had discussed possible rate changes, but that the “prevailing consensus was for unchanged rates”. That decision means the main refinancing rate stays at its lowest level since the single currency was introduced in 1999.  

Draghi said the ECB expected inflation to fall below 2% next year. The target rate is below but close to 2%.   The ECB also revised down its forecast for eurozone economic growth in 2013 to between -0.9% and +0.4%. In September, it forecast a range of -0.4% to +1.4% for the same period. For 2014, it has now forecast growth of between 0.2% and 2.2%.  

“Later in 2013, economic activity should gradually recover as global demand strengthens and our accommodative monetary-policy stance and significantly improved financial market confidence work their way through to the economy,” Draghi said.  

Draghi also confirmed that the ECB would continue to offer unlimited liquidity to eurozone banks until at least the middle of next year.
© 2014 European Voice. All rights reserved.
Varrow

Most viewed in Economics

Germany signals some support for UK over EU reform

Finance ministers call for safeguards for member states outside the eurozone.

Finance ministers

ECB leaves rates unchanged

Draghi defends decision not to take action, says governing council talked about quantitative easing.

Draghi crowd

Commission seeks to reduce economy's reliance on banks

Strategy aims to increase investment in SMEs and infrastructure.

Finance_rain(R)
M.Draghi150611(R)

Related articles

Draghi may cut interest rates to negative levels.

Finance ministers and central bank governors meeting in Washington over the weekend sounded a cautiously upbeat note about the eurozone economy.

The banking union will harden the divides between the north and south and the core and periphery.

Money bolsters government ahead of European elections and in dealings with troika.

Draghi defends decision not to take action, says governing council talked about quantitative easing.

Advertisement

Comments

 

Your comment
Please note: The fields followed by an asterisk (*) are obligatory fields

Comment*

Name*
E-mail*
Website

Please, copy the code on the left into the box on the right

 I accept the Terms & conditions
 I would like to share my e-mail & website

Advertisement

Cookies info | Privacy policy | Terms & conditions