ECB President Mario Draghi told the ECON committee of the European Parliament today that data since September have been “weaker than expected”. And, the “loss in growth momentum mainly reflects weaker trade growth, but also some country and sector-specific factors.”
But he tried to talk down the slowdown as he said “A gradual slowdown is normal as expansions mature and growth converges towards its long-run potential.” Also, “some of the slowdown may also be temporary.” He maintained that “underlying drivers of domestic demand remain in place.” On prices, Draghi reiterated that “recent developments confirm the Governing Council’s earlier assessments of the medium-term inflation outlook.”
And ECB therefore “continues to anticipate that, subject to incoming data confirming our medium-term inflation outlook, net asset purchases will come to an end in December 2018.” But he also emphasized that “prevailing uncertainties still call for patience, prudence and persistence in calibrating our monetary policy stance.” And, “significant degree of monetary policy stimulus will be maintained, even after the end of net asset purchases.”
