2013 in the Eurozone will go worse than expected, but recovery will begin in recent months, to the point that estimates for next year's GDP have even improved. He said it Mario Draghi, President of the European Central Bank, during the press conference following today's Governing Council meeting left interest rates unchanged in the euro area.
EUROZONE GDP: THE NEW FORECASTS
now on 2013 the ECB expects a drop in GDP of 0,6% (three months ago the Frankfurt estimates ranged between -0,9 and -0,1%), while on 2014 forecasts a +1,1% (the range was between zero and +2%). However, Draghi reiterated that downside risks continue to prevail on these forecasts.
RESUME BY THE END OF THE YEAR
Recent survey data “showed some improvements” compared to the low levels reached by the euro area economy and the accommodative line of the ECB “should help support the prospects for recovery later in the year“, Draghi said, specifying however that the dynamics of bank lending to businesses (and not only) remains “weak”.
Price pressures appear limited in the medium term – continued Draghi – and the latest data “confirmed the validity of the rate cut decided at the beginning of May”. The monetary policy of the ECB "will remain accommodative for as long as necessary". The first engine of the recovery will in any case be exports, which have already grown “in Germany, Spain and Italy”.
NEGATIVE DEPOSIT RATES, SIDE EFFECTS
As for the interest rates on deposits which the ECB holds on behalf of the banks, the ECB is "technically ready" to bring them into negative territory, but according to Draghi such a maneuver would have "undesired" side effects.
PUBLIC ACCOUNTS, DON'T WASTE EFFORTS
On the front of public accounts, however, the number one of the Eurotower reiterated how "essential" it is that the governments of the euro area do not "undo" the efforts made in terms of recovery. Furthermore, any concessions of additional time to achieve the objectives should remain "exceptional cases", added Draghi.
