Brussels, 10/06/2010 (Agence Europe) - At the meeting of the Governing Council on Thursday 10 June, the European Central Bank (ECB) decided to keep eurozone interest rates unchanged. The major refinancing operations interest rate therefore remains at 1% and the marginal loan and deposit facility rates at 1.75% and 0.25% respectively. “The current ECB interest rates remain appropriate”, commented Jean-Claude Trichet, the ECB's head, after the meeting. The ECB raised its growth forecasts for 2010 but lowered growth forecasts for 2011.
“Looking ahead, we expect the euro area economy to grow at a moderate pace, in an environment of continued tensions in some financial market segments and of unusually high uncertainty”, explained Trichet. According to the new forecasts produced by the ECB, growth should reach between 0.7% and 1.3% of GDP in 2010 in the eurozone (rather than 0.4% and 1.2% as previously predicted), and between 0.2% and 2.2% in 2011 (rather than 0.5% and 2.5%). Compared with the March 2010 forecasts, the growth range expected for 2010 has been raised slightly (because of economic recovery at global level) but growth forecasts for next year have been slimmed down a little because of expected downward trends in domestic demand.
Inflation stood at 1.6% in May 2010 (compared with 1.5% in April) but “we continue to expect price developments to remain moderate over the policy-relevant medium-term horizon”, explained Trichet. The ECB forecasts inflation in the eurozone between 1.4% and 1.6% in 2010 (compared with 0.8% and 1.6% in the March forecasts), and between 1% and 2.2% in 2011 (compared with 0.9% and 2.1% in the March forecasts). This is a slight rise in expectations due to the price of raw materials calculated in euros. (A.B./transl.fl)