ECB bumps up growth and inflation forecasts, but retains caution

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Compare and contrast the ECB’s old and new growth and inflation forecasts. Spoiler alert: they’re now higher.

GDP growth: New (December)

  • 2017: 1.8% (1.7%)
  • 2018: 1.7% (1.6%)
  • 2019: 1.6% (1.6%)

HICP: New (December)

  • 2017: 1.7% (1.3%)
  • 2018: 1.6% (1.5%)
  • 2019: 1.7% (1.7%)

Nonetheless, there’s no sign that European Central Bank president Mario Draghi is considering reeling in stimulus measures. At his regular post-decision press conference, he said risks remain tilted to the downside, adding:

The cyclical recovery may be gaining momentum. However, underlying inflation pressures continue to remain subdued.

We will continue to look through changes in HICP inflation if it is judged to be transient and to have no implications for the medium-term outlook for price stability. A very substantial degree of monetary easing is still needed to support headline inflation in the medium term.

We stand ready to to increase the asset purchase programme in terms of size and duration.

Here are his prepared remarks in full.

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