“The eurozone economy is expanding robustly, with growth rates stronger than expected previously and significantly above potential”. The president of the ECB said so Mario Draghi during his hearing in front of the European Parliament in Strasbourg, on the very day in which the new president of the Federal Reserve, Jerome Powell, was sworn in in Washington.
Draghi also took the opportunity to reiterate that the ECB will keep rates low for a long time and "well beyond the horizon of asset purchases", i.e. still beyond the end of Quantitative Easing. “We remain fully committed - Draghi told the European Parliament - to achieve our objective of price stability and, in line with our monetary policy strategy, we aim to stabilize inflation around at levels that are below but close to 2%, within a temporarily medium-term period".
"Although our confidence that inflation will converge towards our target of close to but below 2% has strengthened, we cannot yet declare victory on this front", however admitted the ECB president, explaining that after growing by 2 % at the beginning of 2017 thanks to an increase in energy prices, headline inflation has been fluctuating since last May between 1,3% and 1,5%. “Measures of underlying inflation, which exclude volatile components, remain subdued and have yet to show convincing signs of a sustained recovery trend. They have arisen new headwinds due to recent exchange rate volatility, the implications of which for the medium-term outlook for price stability require close monitoring”.
According to preliminary data, added Draghi, returning to talk about the economy of the euro area, the real GDP of the euro area grew by 2,5% in 2017 against the +1,7% expected in December 2016 by ECB staff. “The economic expansion is widespread – said Draghi – e the degree of dispersion of growth rates across countries is at its lowest level for 20 yearsthe. As a result, we see positive growth in over 85% of the sectors of the eurozone economy against a historical average of 74%”.
As for the labor market, the head of the Eurotower explained that after hitting a low point in mid-2013, the number of employed people in the Eurozone grew by about 7,5 million units. “Employment – she said – is now at the highest levels since the introduction of the euro. The unemployment rate continues to decline and is now close to a nine-year low at 8,7%, down 3,3 percentage points from its peak. The more people find work, concluded Draghi, the more household income increases and "this has helped to strengthen the growth of private consumption which in turn is giving strong support to business investments".
