FRANKFURT Dec 16 The impact of the European
Central Bank's 2.3 trillion-euro asset-buying scheme has been
disappointing so far, but growth is picking up and the bank's
presence in the market could absorb shocks, ECB chief economist
Peter Praet told a Dutch Newspaper.
Begun nearly two years ago, the ECB has already bought
around 1.5 trillion euros worth of bonds, mostly government
debt. Inflation, however, is still set to undershoot its target
of just below 2 percent at least through 2018, suggesting that
the scheme has not worked as well as hoped.
"We see that growth is becoming more robust," Dutch
newspaper Telegraaf quoted Praet as saying. "Employment is
increasing; that means an improvement in disposable income and
more consumption," Praet, who sits on the ECB's Executive Board,
said in an interview.
"But the effect on inflation has been disappointing up to
now," Praet added in a rare admission that the scheme, regularly
criticized by Germany, the euro zone's biggest economy, is not
working as well as hoped.
Still, Praet defended the ECB's decision last week to extend
the asset buys until the end of next year, arguing that an early
exit would weigh on inflation and the bank's extended presence
in the market could cushion against future shocks.
"In recent years, we have seen that this can be very useful
when shocks emerge. We have had Brexit, uncertainties related to
US economic policy, and the shocks in emerging markets," Praet
"And most analysts say that past shocks would have had a
much bigger impact if the ECB had not been active in order to
absorb the shocks," he said.
(Reporting by Balazs Koranyi, editing by Larry King)