Euro Zone Growth Risks Ris­ing But Ex­pan­sion to Con­tinue

Iran News - - INTERNATIONAL -

DUBLIN (Reuters) - The euro zone econ­omy will con­tinue ex­pand­ing but risks rang­ing from trade ten­sions to high as­set prices are grow­ing, Eu­ro­pean Cen­tral Bank Pres­i­dent Mario Draghi told Ir­ish law­mak­ers on Thurs­day.

Hav­ing ex­hausted much of its pol­icy fire­power through years of sup­port, the ECB has been grad­u­ally wind­ing down its stim­u­lus, just as growth is slow­ing and trade ten­sions be­tween the world’s big­gest pow­ers are un­der­min­ing con­fi­dence.

“While some sec­tor-spe­cific data and se­lected sur­vey re­sults have been some­what weaker than ex­pected, the lat­est in­com­ing in­for­ma­tion over­all sug­gests that the broad-based ex­pan­sion in the euro area, and in Ire­land, is set to con­tinue,” Draghi told a Par­lia­men­tary hear­ing in Dublin.

Although Draghi reaf­firmed the ECB’s plans to wind down its bond pur­chases, also known as quan­ti­ta­tive eas­ing, by the end of the year, he also warned of clouds on the hori­zon, many of which are be­yond the cen­tral bank’s pol­icy scope.

“The pro­tec­tion­ist trade mea­sures im­ple­mented may have had very lim­ited ef­fects thus far, but the es­ca­la­tion of trade ten­sions is un­der­min­ing con­fi­dence,” Draghi said. He also sin­gled out Brexit and ris­ing fi­nan­cial sta­bil­ity con­cerns as ar­eas re­quired mon­i­tor­ing. “While there is cur­rently no com­pelling ev­i­dence of over-stretched as­set val­u­a­tions at the euro area level, we are see­ing some lo­calised risks,” Draghi said. “How­ever, euro area mon­e­tary pol­icy is not the ap­pro­pri­ate tool with which to ad­dress such risks.”

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