China News Service Client, September 24th. European Central Bank President Mario Draghi said recently that the European Central Bank is ready to cut interest rates again at a time when the euro zone lacks obvious signs of economic recovery.
According to the Wall Street Journal Chinese website on the 24th, Draghi warned in a speech at the European Parliament in Brussels that the longer the large-scale manufacturing downturn in the euro zone lasts, the more likely it is to spread to other areas of the economy. Draghi urged eurozone governments to introduce new spending measures to support growth.
Draghi said: "Although the eurozone service sector continues to be resilient, we should not take it lightly against its ability to maintain strong amid the negative impact."
htmlOn September 12, the European Central Bank announced a "combination punch" of interest rate cuts + restarting QE, lowering deposit interest rates by 10 basis points to -0.5%, the first time since March 2016 to lower the key eurozone interest rate. At the same time, the European Central Bank will purchase bonds of 20 billion euros per month from November 1; adjust its forward guidance, and expect key euro zone interest rates to "stay or be lower than the current level" until the inflation outlook is strongly trending and close enough to the policy target; deposit interest rate grading will be initiated, and a two-level system will be introduced for negative interest rate policies, and the excess liquidity held by some banks will not be affected by negative interest rates.It is worth noting that according to the Financial Times on September 17, the European Central Bank chief economist Philip Lane once emphasized that if necessary, the European Central Bank is ready to further lower interest rates within the negative range at any time. Lane said the ECB will "get inflation targets at all costs."
The latest economic forecast of the European Central Bank shows that the real GDP growth in 2019 was 1.1%, down 0.6 percentage points from the forecast in December last year; the GDP growth rate in 2020 is expected to be 1.2%, down 0.5 percentage points from the previous forecast. The average inflation rate this year is expected to be 1.2%, 1.0% in 2020 and 1.5% in 2021. Inflation expectations are lowered twice in March and September. (China Business Network APP)
