Euro zone growth risks rising but expansion to continue: Draghi

Euro zone growth risks rising but expansion to continue: Draghi

© Reuters. FILE PHOTO: European Central Bank President Mario Draghi speaks during a news conference at ECB headquarters in Frankfurt© Reuters. FILE PHOTO: European Central Bank President Mario Draghi speaks during a news conference at ECB headquarters in Frankfurt

DUBLIN (Reuters) – The euro zone economy will continue expanding but risks ranging from trade tensions to high asset prices are growing, European Central Bank President Mario Draghi told Irish lawmakers on Thursday.

Having exhausted much of its policy firepower through years of support, the ECB has been gradually winding down its stimulus, just as growth is slowing and trade tensions between the world’s biggest powers are undermining confidence.

“While some sector-specific data and selected survey results have been somewhat weaker than expected, the latest incoming information overall suggests that the broad-based expansion in the euro area, and in Ireland, is set to continue,” Draghi told a Parliamentary hearing in Dublin.

Although Draghi reaffirmed the ECB’s plans to wind down its bond purchases, also known as quantitative easing, by the end of the year, he also warned of clouds on the horizon, many of which are beyond the central bank’s policy scope.

“The protectionist trade measures implemented may have had very limited effects thus far, but the escalation of trade tensions is undermining confidence,” Draghi said.

He also singled out Brexit and rising financial stability concerns as areas required monitoring.

“While there is currently no compelling evidence of over-stretched asset valuations at the euro area level, we are seeing some localized risks,” Draghi said. “However, euro area monetary policy is not the appropriate tool with which to address such risks.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Source : Reuters Link

Related Post