European Central Bank to keep stimulus running
Frankfurt: The European Central Bank is expected to signal Thursday that even if inflation rises later this year it won’t consider cutting back support for Europe’s economy, which is lagging the US and China amid a drawn-out struggle with the Covid-19 pandemic.
Extended lockdowns amid a resurgence of the virus, coupled with slow vaccination rollouts, have pushed back hopes for what should eventually be a robust rebound. The central bank for the 19 European Union countries that use the euro still has almost 900 billion euros left in its pandemic bond purchase program, set to run through March 2022. So analysts don’t expect an announcement of more support when the bank’s 25-member governing council holds its regular policy meeting.
The eurozone economy shrank by 6.6 per cent last year and economists say it may have contracted in the first quarter of this year as well. Output is not expected to reach pre-pandemic levels until mid-2022, lagging well behind other major pillars of the global economy such as the US and China.
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