European Central Bank Governor Mario Draghi confirmed today plans to end the stimulus program at the end of the year but also expressed caution about growth forecasts, warning that inflation could be slower than previously.
In a clear message to Italy, Draghi said that countries with high debt must avoid increasing these debts further, and that all countries should respect the rules of the European Union.
His most prominent remarks during the European Banking Congress were as follows:
- There has been a recent a loss in growth momentum, but economic expansion is expected to continue in the coming years.
- Forward guidance has been effective in anchoring expectations about the future path of interest rates.
- Witnessing a long-term slowdown in world trade.
- The Quantitative Easing program is expected to end in December.
- I still see overall risks to growth expectations broadly balanced.
- Wage growth must be resilient during a period of slower growth.
The ECB has indicated earlier that it intends to end the bond purchase program of 2.6 trillion euros by the end of the year, and aims to keep interest rates at low levels at least until the middle of next year.
