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Home BUSINESSECB keeps interest rates unchanged despite low inflation
Fri, 07 Mar, 2014 12:00:53 AM
FTimes- Xinhua Report, March 07
Speaking at a news conference following the meeting, the ECB president Mario Draghi said the governing council made the decision after a raft of largely positive data in February.
GDP in the euro area rose by 0.3 percent in the last quarter of 2013, increasing for three consecutive quarters, Draghi said in a statement.
The Markit eurozone purchasing managers' index (PMI) in the euro area climbed to 53.3 in February, up from 52.9 in January and the earlier flash posting of 52.7.
The eurozone services business activity index rose to 52.6. The improvement of the PMI in the service sector was positive because it could help create jobs, said Draghi.
The euro area annual harmonised index of consumer prices (HICP) inflation was 0.8 percent in February, according to a flash estimate by Eurostat.
Inflation is still far below the target of the ECB. "Inflation expectations for the euro area over the medium and long-term continue to be firmly anchored in line with the target," said Draghi.
Inflation rates should gradually increase and reach levels closer to 2 percent in line with inflation expectations for the euro area over the medium to long term, he added.
According to the latest ECB macroeconomic projections for the euro area, the annual HICP inflation will probably be 1 percent in 2014, 1.3 percent in 2015 and 1.5 percent in 2016.
Annual real GDP are projected to grow 1.2 percent in 2014, 1.5 percent in 2015 and 1.8 percent in 2016.
"The projection for real GDP growth for 2014 has been revised upwards slightly compared with those done in December 2013. The ongoing recovery in the euro area is expected to proceed at a slow pace," Draghi said.
He reaffirmed that the monetary policy stance of the ECB would remain accommodative as long as necessary and that interest rates would remain at current or even lower levels for an extended period of time.
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