ECB economic bulletin: March decisions aimed at lifting inflation towards goal

Global growth momentum continued to moderate in late 2018.

Global growth is projected to decelerate in 2019, but to stabilise over the medium term.

Long-term risk-free rates have declined since the Governing Council’s meeting in December 2018, in the context of a deterioration in the macroeconomic outlook and a perceived slowing of the pace of monetary tightening in the United States

Euro area real GDP growth remained subdued in the fourth quarter of 2018 at 0.2% quarter on quarter

Incoming information suggests that growth will continue at moderate rates in the near term.

This assessment is broadly reflected in the March 2019 ECB staff macroeconomic projections for the euro area. These projections foresee annual real GDP increasing by 1.1% in 2019, 1.6% in 2020 and 1.5% in 2021.

According to Eurostat’s flash estimate, euro area annual HICP inflation increased to 1.5% in February 2019, from 1.4% in January.

Money growth and credit dynamics moderated in January 2019, but bank funding and lending conditions remained favourable.

The aggregate fiscal stance for the euro area is assessed to have been broadly neutral in 2018, but is projected to be mildly expansionary from 2019 onwards.