ECB's Draghi: Risks of deflation largely disappeared
The risks of deflation, defined as generalized price declines that lead to a negative spiral of self-fulfilling prophecies, in the Eurozone "have largely disappeared," President of the European Central Bank (ECB) Mario Draghi said on Friday.
The rate-setter noted that economic growth in the euro area, as supported by the ECB's policy measures, is "firming and broadening," while risks to the growth outlook have somewhat diminished, but remain tilted to the downside. However, even though there has been an improvement in headline inflation over the past year, underlying inflation is expected to remain subdued, Draghi said.
Consequently, a substantial degree of monetary accommodation is still required in the currency zone in order to achieve the central bank's target of inflation below but close to 2%, the policymaker concluded.