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Draghi's introductory remarks at the ECB press conference: text

Below is a reformatted version of the introductory remarks by the President of the European Central Bank Mario Draghi at a press conference in Frankfurt on Thursday:

"Ladies and Gentlemen, the Vice President and I are very pleased to welcome you to our We will now report on the outcome of today's ECB Governing Council.

Based on our regular economic and monetary analyzes, we have decided to leave the ECB's key interest rates unchanged and we expect them to continue for a longer time The period will remain at its current level and will be well beyond the horizon of our net asset purchases.

Regarding non-standard monetary policy measures, we confirm that our current NAV of € 30bn is expected to increase our net asset purchases, if necessary End of September 201

8 or above and, in any case, until the ECB Governing Council sees sustained adjustment of the inflation rate in line with its inflation target. The Eurosystem will continue to re-invest the main refinancing payments on maturing securities acquired under the asset purchase program for a longer period after the end of its net asset purchases and in any case as long as necessary. This will contribute to both favorable liquidity conditions and a fair monetary stance.

After several quarters of stronger-than-expected growth, information received since our session in early March suggests some moderation, but remains solid and broad-based euro zone growth. The underlying strength of the euro area economy continues to support our confidence that inflation will come closer to our inflation target of below, but close to, 2% over the medium term.

At the same time, the underlying inflation indicators remain subdued and continue to show convincing signs of a sustained upward trend. In this context, the Governing Council will continue to monitor the evolution of the exchange rate and other financial conditions with regard to their potential impact on the inflation outlook.

Overall, significant monetary policy stimulus is needed to further expand inflationary pressures and support inflation over the medium term. This continued monetary support is provided through net asset purchases, the significant amount of acquired assets and ongoing and upcoming reinvestments, as well as our interest rate forward guidance.

Now let me explain our assessment in more detail, starting with the economic analysis. Following similar growth in the previous quarter, real GDP rose by 0.7% in the fourth quarter of 2017 compared to the previous quarter. This resulted in an average annual growth rate of 2.4% in 2017 – the highest since 2007.

The latest economic indicators point to some slowdown in the rate of growth since the beginning of the year. This slowdown may be partly due to the high rate of growth observed at the end of last year, while temporary factors could also have an impact. Overall, growth is likely to be solid and broad-based. Our monetary policy measures, which have facilitated the debt relief process, should continue to support domestic demand.

Private consumption is supported by continued employment growth, which in turn is partly attributable to past labor market reforms and growing household wealth. Business investment is further strengthened by very favorable financing conditions, increasing business profitability and solid demand. Housing investments continue to improve. In addition, broad-based global expansion boosts exports in the euro area

The risks to the growth prospects for the euro area remain broadly balanced. However, risks associated with global factors, including the risk of increased protectionism, have been more prominent.

The annual HICP inflation for the euro area increased from 1.1% in February to 1.3% in March 2018. This mainly reflected higher food price inflation. Based on the current futures prices for oil, annual inflation rates are likely to be around 1.5% over the remainder of the year. The underlying inflation rate remains subdued overall.

Looking ahead, they are expected to rise in the medium term, supported by our monetary policies, continued economic expansion, the corresponding absorption of economic slowdown and rising wage growth.

Let us turn to monetary analysis (M3) continues to expand at a robust pace, with an annual growth rate of 4.2% in February 2018, slightly below the narrow band since mid-2015. M3 growth continues to reflect the Impact of the ECB's monetary policy measures and the low opportunity cost of holding the most liquid deposits.

Accordingly, the narrow monetary aggregate M1 remained the main contributor to broad monetary growth and continued to expand at a solid annual rate.

The recovery of credit growth to the private sector seen since the beginning of 2014 is progressing. The annual growth rate of loans to non-financial corporations stood at 3.1% in February 2018, down from 3.4% in January and 3.1% in December 2017, while the annual growth rate of loans to households remained unchanged at 2.9%. The euro area lending survey for the first quarter of 2018 shows that credit growth continues to be driven by rising demand across all credit categories and further easing of lending conditions for corporate loans and house purchase loans

the disclosure since June Monetary policy measures implemented in 2014 continue to strongly support credit conditions for businesses and households, access to finance, especially for small and medium-sized enterprises, and credit flows across the euro area

In conclusion, a cross-check of the outcome of the economic analysis confirmed the signals that came from the monetary analysis, the need for sufficient monetary adjustment to ensure a sustainable return of inflation rates to levels below but close to. 2% in the medium term.

In order to fully benefit from our monetary policy measures, other policies must contribute significantly to Raisi's longer-term growth potential and the reduction of vulnerabilities. The implementation of structural reforms in euro area countries needs to be significantly strengthened in order to increase resilience, reduce structural unemployment and increase productivity and growth potential in the euro area.

Against the backdrop of overall limited implementation of the country-specific recommendations in 2017, greater reform efforts are needed in euro area countries. As far as fiscal policy is concerned, the continued expansion on a broad basis requires the restoration of fiscal buffers. This is especially important in countries where public debt is high.

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