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The ECB is more confident in the recovery of the inflation

Peter Praet

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The European Central Bank is more confident in the recovery of the inflation, according to the chief economist Peter Praet.
“The good economic outlook for the Eurozone is at the heart of the European Central Bank’s (ECB) belief that inflation in the bloc will move closer to its target”, said Peter Praet. “Our monetary policy measures bear fruit, and growth prospects confirm our confidence that inflation will move closer to our goal in the medium term”, added the ECB chief economist.
He confirmed that “sufficient monetary stimulation” is needed and the ECB must remain “patient, persistent and reasonable” with its extremely loose monetary policy.
At the same time, the economists’ enthusiasm for the Eurozone prospects subsides amid worries about weakening inertia. The downward trend in the latest analysis happens after the currency bloc darkens its best year of decade with a flow of disappointing data in 2018. While the survey participants are expecting a trend that has created more from 8 million jobs to continue, they are still less likely to believe that this will happen with last year’s 2.4%.
After five consecutive increases in the forecast for 2018 in the last year, the economists lowered their expectations to 2.3%, reflecting lower consumer consumption and production activity. They also reduced their growth forecasts in each of the first two quarters by 0.5%.
The economists survey shows that interest rates will increase in the second quarter of 2019, with most economists predicting an increase in the interest rate on the deposit of 15 basis points followed by a 10 basis point increase in the base refinancing rate later this year. The forecasts are inflation to reach an average of 1.5% this year and next, before reaching 1.8% in 2020.