ECB President Mario Draghi reiterated in an IMF conference that “broad-based growth in the euro area will continue.” He added the central bank’s policy measures “continue to underpin domestic demand, which remains the mainstay of the ongoing expansion.” Global expansion will also continue to benefit Eurozone exports.
On inflation, higher headline inflation reflected rise in energy prices. “While measures of underlying inflation remain generally muted, they have been increasing from earlier lows.” And he echoed the monetary policy account that “uncertainty around the inflation outlook is receding.” While ECB is on course to stop asset purchases, he emphasized that “significant monetary policy stimulus is still needed to support the further build-up of domestic price pressures and headline inflation developments over the medium term.”
On financial stability, he said “recent episodes of heightened financial market volatility have led to only limited contagion across countries and markets.” However, “the uncertainty triggered by a cliff-edge Brexit could have the potential to pose a more significant downside risk to financial stability.”
