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AFP
Frankfurt
Economic developments in the eurozone have been “weaker than expected”, European Central Bank chief Mario Draghi said Tuesday, stressing the need for continued monetary stimulus.
The warning comes at a time of mounting concern about slowing growth in the top EU economies of Germany, France and Italy, fuelled by uncertainty about Brexit and the knock-on effects of US-China trade tensions.
“Recent economic developments have been weaker than expected and uncertainties, notably related to global factors, remain prominent,” Draghi told members of the European Parliament in Strasbourg.
“So there is no room for complacency. A significant amount of monetary policy stimulus is still needed,” the outgoing ECB president said in his last hearing before the plenary.
The ECB last month ended its massive government and corporate bond-buying programme, designed to stoke growth and drive up inflation to the bank’s target of just under 2.0 percent.
The easy money scheme saw the Frankfurt institution pump 2.6 trillion euros into the eurozone economy over a nearly four-year period.
Its end means the removal of a key pillar of crisis-era stimulus, with the ECB saying it was on track to meet its inflation goal.
But Draghi has stressed that the bank will continue to support the region’s economy through ultra-low interest rates and by reinvesting the proceeds from maturing bonds for a long time to come -- keeping borrowing costs low.
Draghi’s speech came on the same day that Germany, Europe’s biggest economy, posted its weakest annual growth rate in five years.
The country’s statistics office Destatis said Germany’s output expanded 1.5 percent in 2018, down from 2.2 percent the two previous years.
But it added that Germany appeared to have narrowly dodged a second consecutive quarter of negative growth in the final months of the year, avoiding sliding into recession.
For now, policy makers don’t expect the bloc to tumble into recession, Draghi said. He argued that the region’s domestic economy remained strong and that the slowdown partly reflected temporary factors that would fade, such as bottlenecks in Germany’s auto industry.
Frankfurt
Economic developments in the eurozone have been “weaker than expected”, European Central Bank chief Mario Draghi said Tuesday, stressing the need for continued monetary stimulus.
The warning comes at a time of mounting concern about slowing growth in the top EU economies of Germany, France and Italy, fuelled by uncertainty about Brexit and the knock-on effects of US-China trade tensions.
“Recent economic developments have been weaker than expected and uncertainties, notably related to global factors, remain prominent,” Draghi told members of the European Parliament in Strasbourg.
“So there is no room for complacency. A significant amount of monetary policy stimulus is still needed,” the outgoing ECB president said in his last hearing before the plenary.
The ECB last month ended its massive government and corporate bond-buying programme, designed to stoke growth and drive up inflation to the bank’s target of just under 2.0 percent.
The easy money scheme saw the Frankfurt institution pump 2.6 trillion euros into the eurozone economy over a nearly four-year period.
Its end means the removal of a key pillar of crisis-era stimulus, with the ECB saying it was on track to meet its inflation goal.
But Draghi has stressed that the bank will continue to support the region’s economy through ultra-low interest rates and by reinvesting the proceeds from maturing bonds for a long time to come -- keeping borrowing costs low.
Draghi’s speech came on the same day that Germany, Europe’s biggest economy, posted its weakest annual growth rate in five years.
The country’s statistics office Destatis said Germany’s output expanded 1.5 percent in 2018, down from 2.2 percent the two previous years.
But it added that Germany appeared to have narrowly dodged a second consecutive quarter of negative growth in the final months of the year, avoiding sliding into recession.
For now, policy makers don’t expect the bloc to tumble into recession, Draghi said. He argued that the region’s domestic economy remained strong and that the slowdown partly reflected temporary factors that would fade, such as bottlenecks in Germany’s auto industry.
