ECB's Draghi says Eurozone in midst of solid economic expansion
ECB's Draghi out with scheduled speech 17 Nov
The Draghster speaking at the Frankfurt European Banking Congress "Europe into a New Era - How to Seize the Opportunities"
- Despite this progress on the real side of the economy, from a monetary policy perspective our task is not complete, as we have not yet seen a sustained adjustment in the path of inflation
- A sustained adjustment is one where the return of headline inflation towards our objective is durable and not just a temporary blip, and it can be self-sustained without monetary policy support. We do now see inflation moving steadily away from the very low levels of recent years, although progress remains incomplete and partial.
- Two indicators are important for gauging the durability of inflation. The first is the outlook for growth, since this helps us assess whether inflation will continue to rise as we expect.
- The second is underlying inflation. This allows us to assess whether inflation will stabilise around our aim once the effects of volatile factors, such as oil and food price swings, have faded away.
- The growth outlook is now clearly improving, for all the reasons I have mentioned. But the underlying inflation trend remains subdued. According to a broad range of measures, underlying inflation has ticked up moderately since the start of this year, but it still lacks clear upward momentum. A key issue here is wage growth.
- The ECB's mandate is framed in terms of price stability, as this is the best contribution that we can make to the welfare of citizens. Ensuring price stability is a precondition for the economy to be able to grow along a balanced path that can be sustained in the long run. This is the guiding principle of all our monetary policy decisions.
- With the recovery ongoing, now is the right moment for the euro area to address further challenges to stability. This means actively putting our fiscal houses in order and building up buffers for the future - not just waiting for growth to gradually reduce debt.
- It means implementing structural reforms that will allow our economies to converge and grow at higher speeds over the long term. And it means addressing the remaining gaps in the institutional architecture of our monetary union.