Investing.com - European Central Bank President Mario Draghi said Monday that the euro area economy is expanding robustly, but inflation is yet to show sustained signs of moving higher so patience with regard to monetary policy is still needed.
In a statement to the European Parliament, Draghi said that growth is stronger than previously expected, but inflation has yet to show more convincing signs of a sustained upward adjustment.
"While the strong momentum of the euro area economy has clearly strengthened our confidence in the inflation outlook, patience and persistence with regard to monetary policy is still needed for inflation to sustainably return to levels of below, but close to, 2%,” Draghi said.
He said the relationship between growth and inflation remains largely intact, even if it was temporarily weakened.
The ECB anticipates that headline inflation will resume its gradual upward adjustment, he added, but noted that uncertainties - including the strong euro - continue to prevail.
“In particular, the recent volatility in financial markets, notably also in the exchange rate, deserves close monitoring with regard to its possible implications for the medium-term outlook for price stability,” he said.
Draghi concluded his statement by urging euro zone governments to enact further policy measures needed to boost growth once interest rates have to rise.
“Our monetary policy measures have had tangible benefits for the euro area economy. Further policy initiatives are however needed to reduce vulnerabilities, strengthen resilience in crisis situations and increase growth potential. Only ambitious policies will deliver concrete benefits for the people of Europe,” he said.