FRANKFURT (Reuters) – The European Central Bank (ECB) raised its forecast for 2015 inflation in the euro area, saying its program of asset purchases 60,000 million euros per month is paying off.
The ECB estimated that inflation would average 0.3% this year, above the March forecast prices unchanged to reflect the rise in the oil market, the recovery of growth and the impact of its massive program of quantitative easing more than 1 billion euros.
The central bank on Wednesday left interest rates unchanged, expects gross domestic product (GDP) of the block to expand 1.5%, the same level forecast in March. This would represent the highest rate of growth in the euro area since 2011, when the economy grew 1.6%.
The ECB’s inflation target is located just under 2%, but the anemic growth, weak consumption and low levels of credit outstanding, in addition to falling crude prices, pushed the price deflation earlier this year before returning to positive territory in May.
The loose monetary policy should continue
The ECB chief Mario Draghi pledged to continue with accommodative monetary policies, including the extension of its program of quantitative easing.
At a press conference following the announcement of monetary policy, Draghi emphasized the need for “full implementation” of monetary policies for the economic recovery of the euro area.
Previously, Draghi had described as “surprising” speculation about a cut in the asset purchase scheme by 60,000 million euros per month.
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