FRANKFURT, (Reuters) - The European Central Bank kept its policy unchanged as expected on Thursday, staying on course to end bond purchases by the end of December and to raise rates sometime after next summer.
Following are highlights of ECB President Mario Draghi’s comments at a post-policy meeting press conference.
On Italy, you have to remember that Italy is a fiscal discussion, so there wasn’t much discussion about Italy... Vice President Dombrovskis was there, and I asked him permission to quote him to what he said. He said of course, ‘we have to observe and apply fiscal rules. But we are also seeking a dialogue.’
While measures of underlying inflation remain generally muted, they have been increasing from earlier lows.
Looking ahead, underlying inflation is expected to pick up towards the end of the year and to increase further over the medium term.
The risks surrounding the euro area growth outlook can still be assessed as broadly balanced. At the same time, risks relating to protectionism, vulnerabilities in emerging markets, and financial market volatility remain prominent.
NEAR-TERM GROWTH IMPACT
Some recent sector-specific developments are having an impact on the near-term growth profile.
The Governing Council stands ready to adjust all of its instruments as appropriate to ensure that inflation continues to move towards the... inflation aim in a sustained manner.
Uncertainties relating to protectionism, vulnerabilities in emerging markets, and financial market volatility remain prominent.
Significant monetary policy stimulus is still needed to support the further buildup of domestic price pressures and headline inflation developments over the medium term.
“The underlying strength of the economy continues to support our confidence that the sustained convergence of inflation to our aim will proceed and will be maintained even after a gradual winding down of our net asset purchases.”
“Incoming information, while somewhat weaker than expected, remains overall consistent with an ongoing broad-based expansion of the euro area economy and gradually rising inflation pressures.”
EMEA news desk