The current economic upturn in the euro zone, even modest, one must, in fact, the “two-factor” complementary, the decline in oil barrel prices since June 2014 and the stimulus policy money the European Central Bank (ECB), Mario Draghi said on Tuesday at a press conference after the meeting of the board of governors decided not to move in the rates of interest directors. Draghi would not fail to emphasize the smooth progress of the new expanded program of public debt purchases and private set in motion since March 9.
After stopped for a few minutes by a protest of an activist, presumably from the FEMEN movement against the “dictatorship of the men at the ECB,” ECB President would eventually finish reading macroeconomic analysis and spend their responses to the journalists present.
The two factors that are holding the recovery, one that derives from the specific situation on the world oil market and other ECB action, Draghi eventually add a third factor, a situation more “healthy” of the banking system of the euro area, after the examinations last year.
This healthier situation now allows the banking sector of the euro area better play the role of “channel” of transmission of monetary policy to the real economy, and in particular to the world business. The first signs of the “channel” is working best are already visible in the resumption of demand for credit, the statement said the ECB meeting. The survey quarterly conducted by the ECB with 142 banks in the euro zone, published this week, and focused on the changes in the first quarter and expectations for the second, states that the additional liquidity facilitated by monetary stimulus , is already being used by banks to grant loans.
From the point of view of the ECB’s monetary policy objectives towards a medium-term inflation anchored close to 2%, the board of Governors notes that the negative inflation process fell, with Eurostat to disclose a negative inflation of -0.1% in March after -0.3% in February and -0.6% in January. However, Draghi stressed that the central bank’s strategy is not based on specific data, but the assessment of trends. What about the trend in many indicators of inflation, it dramatically improved compared to last December. He added that it is still not obvious the effect on inflation in the euro depreciation against a basket of currencies partners in the eurozone, and in particular against the dollar. Warned that by 2015, taking into account the current course of oil prices (with an average price of $ 58.14 provided by the staff of the International Monetary Fund), the annual inflation will “remain low or even negative in the coming months “.
The ECB expects that the recovery can be strengthen. Growth in real GDP in the euro area grew by a modest 0.3% in the last quarter of 2014 over the same period. According to the “World Economic Outlook” (WEO) of the International Monetary Fund (IMF), the growth in the eurozone last year was 0.8% and the forecast to 1.5% in 2015 and 1.6% in next year and the same rate in 2019, the last year of the projections released now.
San growth levels modest compared to 3% recorded in 2007, before the global financial crisis. Christina Lagarde, the director general of the IMF, speaks of “mediocrity”, but this language is not used by the ECB. Even this growth horizon depends on “full implementation” of monetary policy “accommodative” acted by the ECB, Draghi stressed. A phrase underlined that there remained doubts about the indispensability of it and the fact that this central bank team does not retreat this line, despite constant doubts raised by many analysts that Draghi considered “premature”. Reaffirmed that the ECB has no evidence to indicate that monetary policy “accommodative” is generating “bubbles”.
He insisted that monetary policy is not enough and that the implementation of reforms in labor market and the product must gain momentum in many euro members and responsible fiscal policy to support the recovery, though still-as the Stability and Growth Pact.
The ECB received this spring a “gift” of the IMF, whose meetings are taking place in Washington DC. The WEO points to a recession probability of descent to the end of this year and deflation until the second quarter of next year, although in the latter case remains close to 30%.
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