The minutes of the ECB suggest risk projections … – The Wall Street Journal Americas

FRANKFURT (Dow Jones) – The minutes of the last meeting of the governing council of the European Central Bank suggest that recent growth projections of the central bank may not be final.

“It was emphasized that the growth prospects for 2017 depended on a number of factors may be less supportive for growth” towards the end of the reporting period, said the company, according to the minutes of the meeting held on 4 and 5 March.

In the press after the meeting, the ECB announced that its experts anticipated an increase of 2.1% in 2017 for the whole of the eurozone.

However, at the meeting, members of the governing council noted that “it was not clear to what extent monetary policy would remain supportive in 2017″ as the quantitative expansion of the ECB will end in September 2016.

Moreover, the recovery of growth in the period “depended on the assumption that oil prices remain low and further strengthening of international trade,” say the minutes, released Thursday. “In this regard, it was argued that oil prices could be higher than currently assumed if global demand would improve considerably. In addition, it was noted that growth could be limited by structural bottlenecks in some countries. ”

Anyway, those responsible for the monetary policy of the ECB said at the meeting that the latest data “contributed arguments for a ‘cautious optimism’ ‘compared to a scenario of gradual recovery and return of inflation rates close to 2%.

The ECB has an inflation target in the medium term of just below 2%. The central bank takes some time without being able to meet that objective. In March, the inflation rate in the eurozone fell 0.1% from a year earlier after falling 0.3% yoy in February.

The minutes also show that the growth outlook for 2015 does not imply that recent monetary policy actions are “less necessary”, but these projections “confirmed that the full implementation of these measures was necessary so that the mandate of the governing council is satisfied “.

In Proceedings mentioned that there is a “widely held” that the package of monetary policy adopted since last June was “entirely appropriate” vision. Therefore, “there is no need to consider any new initiatives at the moment”. In fact, “the focus now focused on the implementation of all monetary policy measures that had been taken in recent months.”

The minutes of the last meeting of the ECB also suggest that the governing council of the entity believes that the current rate of interest on deposits is a red line. “Cautious view of some market perceptions that the deposit rate could fall below -20 bp was expressed, which should be considered by the governing council as the effective ground.”