Frankfurt: Mario Draghi said the European Central Bank’s stimulus hasn’t finished the job yet, even as he acknowledged that the region’s economy is getting stronger.
“The economic recovery has evolved from being fragile and uneven into a firming, broad-based upswing,” the ECB president said at the opening of a hearing at the Dutch Parliament in The Hague yesterday. “Nevertheless, it is too early to declare success.”
ECB policy makers are pondering whether and how to communicate a gradual removal of stimulus amid a steadily strengthening economy that has so far showed little signs of generating faster price growth. While Executive Board members Yves Mersch said on Monday that the central bank was “within reach” of describing risks to the recovery as “broadly balanced” – wording that could signal the first step toward unwinding stimulus – Draghi struck a somewhat more cautious note.
“Incoming data confirm that the cyclical recovery of the euro area economy is becoming increasingly solid and that downside risks have further diminished,” he said. However, “underlying inflation pressures continue to remain subdued and have yet to show a convincing upward trend.”
