ECB to keep rates unchanged until mid-2020, revises growth forecasts

Source: Xinhua| 2019-06-06 22:11:16|Editor: xuxin
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VILNIUS, June 6 (Xinhua) -- The European Central bank (ECB) has left interest rates unchanged and revised Eurozone economic growth forecast in a meeting in Lithuanian capital Vilnius on Thursday.

In its monetary policy decision's statement, ECB said it now expects rates to remain at their present levels "at least through the first half of 2020 and in any case for as long as necessary".

Thursdays' monetary decision marks a shift in ECB monetary policy's forward guidance. Earlier ECB said it would expect rates to remain unchanged "at least through the end of 2019".

During a press conference following the decision, ECB President Mario Draghi motivated the decision to extend the forward guidance on interest rates by incoming economic data which point to "somewhat weaker growth in the second and third quarters" of 2019.

"This reflects the ongoing weakness in international trade in an environment of prolonged global uncertainties, which are weighing, in particular, on the euro area manufacturing sector," Draghi told press conference in Vilnius.

On Thursday in Vilnius, ECB also presented revised economic growth and inflation forecasts for the Eurozone for 2019, 2020 and 2021.

ECB now expects Eurozone economy to grow by 1.2 percent this year, 1.4 percent in both 2020 and 2021.

In its March forecast, ECB economists expected Eurozone economy to grow by 1.1 percent this year, 1.6 percent in 2020 and 1.5 percent in 2021.

"The prolonged presence of uncertainties related to geopolitical factors, the rising threat of protectionism and vulnerabilities in emerging markets is leaving its mark on economic sentiment," Draghi commented on revised economic forecasts for the Eurozone.

After revising inflation forecasts, ECB now expects 1.3 percent inflation in the Eurozone in 2019, 1.4 percent in 2020 and 1.6 percent in 2021. In its March forecast, ECB economists expected inflation in the Eurozone to be 1.2 percent this year, 1.5 percent in 2020.