ECB Mersche: Risks to growth remain to the downside

ECB Mersche speaks in Luxembourg

• Risks to growth outlook remain on the downside
• Likelihood of deflation is limited
• Better policy mix can help ECB to achieve goal faster
• The longer the weakness in manufacturing process, the greater the risk that other sectors of the economy will be affected
• Likelihood of deflation remains limited, market expectations of inflation over the medium-term are settling around the values that are not consistent with our inflation aim.

Although deflation risks are limited, Mersch is not happy that inflation expectations remain below the inflation goals. That combined with risk remaining to the downside, tilt the bias to the dovish side.