FRANKFURT (MNI) – There are no deflationary risks in the Eurozone
since money growth is expected to pick up in the months ahead, European
Central Bank Executive Board member Juergen Stark said Friday.
“I do not see short-term deflationary risks,” Stark said, noting
that currently only one Eurozone country has negative inflation rates.
“I do not accept that temporary negative inflation rates in one
country would represent a deflationary risk for the euro area as a
whole,” Stark said during the “ECB And Its Watchers Conference.”
Recent money developments also do not point to a deflationary trend
ahead, Stark observed. “We expect a very gradual recovery in M3 growth
in the months to come,” he said.
“We see some improvement in particular in loans to private
households,” Stark said. Monthly flow in bank loans to non-financial
corporations was also positive in May, he observed.
“Whether this is already a turning point is too early [to say].
This is a question mark. However, this is a positive sign,” Stark added.
The ECB’s chief economist emphasized that the central bank’s
government bond buying program should not be interpreted as quantitative
easing.
The ECB has thus far sterilized all its purchases and “we will
continue to sterilize,” Stark said.
–Frankfurt newsroom +49 69 72 01 42; Email: jtreeck@marketnews.com
[TOPICS: MT$$$$,M$$EC$,M$X$$$,M$$CR$,MGX$$$]
