The Latest: Low rates expected to support European economy
FRANKFURT, Germany (AP) — The Latest on the European Central Bank’s monetary policy meeting (all times local):
European Central Bank President Mario Draghi says strong domestic demand and low interest rates are supporting the economy in Europe despite a recent moderation in growth.
Draghi said at a news conference Thursday that “the underlying strength of domestic demand continues to underpin the eurozone expansion.”
He spoke after the bank decided to stop its bond-buying stimulus program, which has helped the economy emerge from its debt crisis four years ago, at the end of this year.
Draghi said rising wages gave the bank confidence it would meet its goal of keeping inflation near its target of just under 2 percent even after the bond purchase stimulus ends.
The European Central Bank has lowered its economic growth projections for this year and next year.
The bank said Thursday it was lowering the outlook for the eurozone economy this year to 1.9 percent from 2.0 percent in its previous forecast in September.
The projection for 2019 was lowered to 1.7 percent from 1.8 percent.
The 19 countries that use the euro have seen growth ease to 0.2 percent in the third quarter from the previous quarter, down from stronger growth at the end of last year. Worries about trade conflict between the U.S. and China, a possible meltdown of government finances in Italy, and a potential disorderly exit by Britain from the EU have weighed on activity.
The European Central Bank is expected to halt the stimulus program that it deployed nearly four years ago to nurture a teetering eurozone economy back to health.
Analysts say the bank is likely to confirm Thursday its plan to stop the program’s monthly bond purchases at year end despite worries about growth. The program pumped 2.6 trillion euros ($3 trillion) into the economy of the 19 countries that use the euro.
Attention will turn to President Mario Draghi’s news conference for clues about whether the bank might postpone its first interest rate increase.
Draghi has credited the stimulus and low rates with creating 9.5 million jobs while Europe’s economy healed from a debt crisis that threatened to break up the euro. But critics in Germany say it bailed out fiscally wobbly governments.