ECB: Favorable terms key to bolstering confidence
Maintaining favorable financing conditions during the still ongoing COVID-19 pandemic is the key tool to reducing uncertainty and bolstering confidence, which in turn accelerates economic activity and safeguards medium-term stability of prices, the European Central Bank (ECB) stated in its newest Economic Bulletin published on Thursday.
The ECB projected the growth of the European Union's real gross domestic product (GDP) will rise by 6.2% in 2021 and then drop to 4.2% and 3.7% in 2022 and 2023, respectively. It expressed its expectations the economic activity will accelerate in the second half of the year, driven by the easing of measures imposed to curb the spread of the virus and stronger foreign demand from the United States and the United Kingdom. The bank also noted that "price pressures are expected to remain subdued overall, partly reflecting low-wage pressures."
The ECB went on to warn that "uncertainties remain, as the near-term economic outlook continues to depend on the course of the pandemic and on how the economy responds after reopening." Still, it pointed out the "risks surrounding the euro area growth outlook are broadly balanced," with headline inflation projected to remain below the Governing Council's target.