• Disinflationary process was well on track.
  • Inflation was still expected to remain above target in the near term.
  • Confidence in a timely and sutained convergence had increased.
  • High levels of uncertainty, lingering upside risks to energy and food prices, a strong labour market and high negotiated wage increases called for caution.
  • Potential future actions by the US Administration that might lead to a global economic slowdown.
  • Oil and gas prices up to now did not suggest a major change to the baseline in the staff projections.
  • It was relatively safe to make the assessment that monetary policy was still restrictive.
  • Risks to the inflation outlook were seen as two-sided.
  • Some evidence suggesting a shift in the balance of risks to the upside since December.
  • Looking ahead there seemed reasons to believe that both services inflation and wage growth would slow down in line with the baseline scenario.
  • It was remarked that an undershooting of inflation could not be ruled out.
  • View was also expressed that the economic outlook in the December staff projections had likely been too optimistic and that there were signs of downside risks materialising.
  • Still seen as plausible that, within a few quarters, there would be a consumption-driven recovery.
  • Maintaining the deposit facility rate at the current level of 3.00% would excessively dampen demand.
European Central Bank
European Central Bank
Source: Forex Live