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15 May 2014
ECB's Constancio says Eurozone austerity programs partly responsible for low inflation
FXStreet (Łódź) - ECB Vice-President Vitor Constancio said Thursday that the persistent low inflation in the Eurozone was partly a consequence of the austerity measures implemented across the area but that the broader economic recovery would gradually stimulate growth.
"This does not mean at all that we are complacent about risks arising from a too protracted period of low inflation," Constancio said in a speech at the Asia Europe Economic Forum in Berlin. "We have therefore reaffirmed our forward guidance and stressed that we are determined to act swiftly if required and do not rule out further monetary policy easing."
Still, the ECB Vice-President assured that he didn't see a risk of deflation taking hold in the Eurozone. He also commented on the central bank's Q2 survey of professional forecasters, released at the time of his appearance, and showing downward revisions to HICP estimates (from 1.4% to 1.3% for 2015 and from 1.7% to 1.5% in 2016, while long term inflation estimates were reduced to 1.8% from 1.9%). Constancio said that this was an expected outcome and that the most important are the medium term projections.
"This does not mean at all that we are complacent about risks arising from a too protracted period of low inflation," Constancio said in a speech at the Asia Europe Economic Forum in Berlin. "We have therefore reaffirmed our forward guidance and stressed that we are determined to act swiftly if required and do not rule out further monetary policy easing."
Still, the ECB Vice-President assured that he didn't see a risk of deflation taking hold in the Eurozone. He also commented on the central bank's Q2 survey of professional forecasters, released at the time of his appearance, and showing downward revisions to HICP estimates (from 1.4% to 1.3% for 2015 and from 1.7% to 1.5% in 2016, while long term inflation estimates were reduced to 1.8% from 1.9%). Constancio said that this was an expected outcome and that the most important are the medium term projections.