The new ECB’s stimulus package will not significantly help bring inflation back to target, economists surveyed by Reuters said, adding that the risk of recession in the eurozone has increased over the next two years.
According to the September meeting, the ECB announced the resumption of asset-purchases for an indefinite period and took the deposit rate even further to negative territory in an attempt to support the weakening economy.
However, more than a third of the members of the Board of Governors of the ECB spoke against the decision to resume the asset purchase program, which ended at the end of last year, questioning its effectiveness.
The vast majority – 95% of economists who answered an additional question in the Reuters study – agreed with this, saying that the stimulus package would not significantly help bring inflation back to the ECB target of close to 2%.
Inflation is expected to average 1.2% this year – this is the lowest value since inflation projections for this year started to appear in January 2017. The inflation forecast for next year at 1.2% was also the lowest since the start of surveys for this period in April 2018.
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