Investing.com - The European Central Bank made only small adjustments to its forecasts for growth and inflation following its monetary policy meeting on Thursday and reiterated that interest rates will remain at current levels for an “extended period”.
ECB President Mario Draghi said it revised its inflation forecast for 2016 up to 0.2% from 0.1% before, but kept its inflation forecasts for 2017 and 2018 at 1.3% and 1.6% respectively.
Draghi also warned that inflation in the euro area is likely to remain very low, or negative, for some time.
The central bank raised its growth forecast for 2016 to up to 1.6%, from 1.4%, but left its forecasts for the following two years unchanged.
Draghi said the economic recovery is proceeding ‘gradually’, but warned that the risks to the global economy are to the downside, citing the June 23 U.K. referendum on European Union membership.
Draghi said the ECB believes that Britain should stay in the EU, but added that it was ready for any outcome.
The comments came after the ECB left its headline interest rate at record low of zero. The bank held the deposit rate at -0.4% and the marginal lending facility at -0.25% at its monetary policy meeting earlier Thursday.
Draghi reiterated that the ECB will continue to run its bond-purchasing program until March 2017, or until inflation moves back towards the bank’s target of close to, but just below 2%.
The ECB will start buying debt issued by companies on June 8, as part of the stimulus program announced in March.
Draghi also said the ECB discussed the ‘waiver’ on Greek bonds, which would allow them to be used as collateral for liquidity operations, but said Athens still has ‘prior actions’ to undertake before the Governing Council will discuss the reinstatement of the waiver.