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The ECB's meeting: Waiting for the recovery

THE European Central Bank (ECB) left its monetary stance unchanged today. The decision came as little surprise just one month after it had lowered its main policy rate, from 0.75% to 0.5%. That made the press conference after the governing council’s meeting in Frankfurt the main event, but there were no fireworks.Mario Draghi, the ECB’s president, had set the tone in his opening statement, which was liberally sprinkled with the word “subdued”. Inflation was subdued. So, too, was credit. And when the recovery eventually occurred later this year its pace would also be subdued.In keeping with this downbeat assessment, the quarterly staff forecast for output this year has been revised down again. GDP is expected now to fall by 0.6% in 2013; in March a decline of 0.5% had been predicted (last December the drop was put at 0.3%). Moreover, the council’s assessment was that risks to the forecast were to the downside, arising from weaker than expected domestic and global demand.Mr Draghi drew some comfort from signs of improvement in business surveys even though he acknowledged this was from low levels. A report on June 5th on euro-wide output in manufacturing and services compiled by Markit, a research firm, rose for example from 46.9 in April to 47.7 in May. But since the dividing line between contraction and expansion is 50, that is still consistent with the recession, which ...