The ECB will maintain the path of monetary despite the economic recovery – Yahoo Finance Spain

By Balazs Koranyi and Francesco Canepa

FRANKFURT (Reuters) – despite the fact that the euro-zone growth and inflation slowly increasing, the European Central Bank (ECB) will have to justify Thursday his stance of monetary ultrarrelajada is still necessary to keep the recovery on course.

it Is almost certain that the ECB will maintain the measures in force and will keep the promise of a program of stimuli prolonged, after increasing last month, its bond buying program.

the president of The ECB, Mario Draghi, you can argue that the institution has done its part to repair the growth, but also indicating, probably, that the recovery is not sustained by itself alone, that the underlying inflation is weak and the markets could become more volatile before the climbs graded of types of the Federal Reserve in the US.

therefore, it is expected that Draghi will say that it is not desirable to close the taps now, highlighting, once again, the divergent paths of political between the ECB and the Federal Reserve, whose chairman, Janet Yellen, said on Wednesday, further increases in the cost of borrowing. [nS0N1DU01Y]

“Draghi seems to be comfortable allowing the inflation to rise more before you declare victory over deflation,” said David Kohl, an economist with the swiss bank Julius Baer.

At first glance, it is logical that Draghi is relaxed. Inflation reached a peak of three years ago last month, the manufacturing activity is accelerating and confidence indicators are strengthening. Everything points to a solid growth at the end of last year. [nL5N1EW2FY]

In fact, the growth of the business of the euro area was the fastest in more than five years in December, the order books are increasing the export demand and consumption is maintained despite the increasing cost of energy, which indicates a level of resilience not seen before the debt crisis of the block. [nU8N1D3010]

however, the overview of the prices underlying -that do not include energy and food due to its high volatility – is confusing, which gives Draghi a lot of arguments to reject the criticism, especially that of Germany, the largest economy in the block and main opponent of the ECB in the field of monetary policy. [nL4N1F041S]

inflation is still half of the 2 percent target of the bank and the increase was due mainly to higher oil prices, while the underlying growth of prices remains dangerously weak.

The euphoria in financial markets after the unexpected victory of Donald Trump in the election of united States did not correspond even with specific political measures and the threat of making more protectionist united States and possibly the Uk could reverse the sentiment in the markets.

The ECB announces its decision on interest rates to 13.45 time Spanish and Draghi gives a press conference at 14:30 hours.