April 27, 2017 / 1:14 PM / 3 months ago

HIGHLIGHTS-Draghi comments at ECB press conference

4 Min Read

FRANKFURT, April 27 (Reuters) - The European Central Bank left its ultra-easy policy stance firmly in place on Thursday as inflation continues to undershoot its target for a fifth straight year, even as economic growth is on its best run since the global financial crisis.

Following are highlights of ECB President Mario Draghi's comments at a press conference after the policy meeting.

Inflation Assessment Unaltered

I don't think there is any need to discuss (sequencing of policy changes) now. We have not seen sufficient evidence to alter our assessment of the inflation outlook, and we are not sufficiently confident that inflation will converge to levels consistent with our inflation aim in a durable and self-sustaining manner.

Recovery Becoming Increasingly Solid

Incoming data since our meeting in early March confirm that the cyclical recovery of the euro area economy is becoming increasingly solid and that downside risks have diminished.

On the Prospect of a Macron Presidency in France

In the Governing Council meetings we discuss policies, not politics.


It is premature to react or make policy decisions based on the future policies pursued by the U.S. administration at this point... One thing that may have come out of the meetings is that perhaps the risk of trade protectionism may have somewhat receded... Markets are in the course of a reassessment of the U.S. fiscal policy and I frankly wouldn't feel like going beyond that.

On Removing the Easing Bias in Interest Rates

We didn't discuss it ... most of the discussion focused really on the balance of risks concerning growth, not inflation.

Easing biases are actually linked to inflation -- in other words, the easing biases are meant to cope with tail risks concerning the inflation rate, not growth directly. It's quite clear that as growth perspectives improve, the probability of these tail risks may go down, but we are not there yet.


All in all the (economic) improvements are there, have been continuing, have been broadening but we still have many fragilities one of which speaking of leverage is given by the fragility in the banking sector and the NPL (non-performing loan) stocks in many countries that could have a much higher credit growth if it had not been for the NPLs.

Underlying Inflation

Underlying inflation pressures continue to remain subdued and have yet to show a convincing upward trend. Moreover, the ongoing volatility in headline inflation underlines the need to look through transient variations in HICP inflation which have no implication for the medium-term outlook for price stability.

A very substantial degree of monetary accommodation is still needed for underlying inflation pressures to build up and support headline inflation in the medium-term.

In terms of my criteria the (inflation) assessment hasn't really changed.

Growth Risks

The risks surrounding the euro area growth outlook, while moving toward a more balanced configuration, are still tilted to the downside.

Economic Expansion

The ongoing economic expansion will continue to firm and broaden.

Foreign Demand

The signs of a stronger global recovery and increasing global trade suggest that foreign demand should increasingly add to the overall resilience of the economic expansion of the euro area. (EMEA MPG Desk)

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