ECB Preview
March 7, 2012
There likely will be no further changes of ECB policy, which has eased extensively since Draghi assumed the central bank’s presidency some four months ago. New quarterly growth and inflation projections are due, however, and the table below gives the history of changes in those range estimates.
| GDP 2011 | GDP 2012 | GDP 2013 | CPI 2011 | CPI 2012 | CPI 2013 | |
| 12/11 | +1.5/1.7% | -0.4/+1.0% | +0.3/2.3% | +2.6/2.8% | +1.5/2.5% | +0.8/2.2% |
| 09/11 | +1.4/1.8% | +0.4/2.2% | +2.5/2.7% | +1.2/2.2% | ||
| 06/11 | +1.5/2.3% | +0.6/2.8% | +2.5/2.7% | +1.1/2.3% | ||
| 03/11 | +1.3/2.1% | +0.8/2.8% | +2.0/2.6% | +1.0/2.4% | ||
| 12/10 | +0.7/2.1% | +0.6/2.8% | +1.3/2.3% | +0.7/2.3% | ||
| 09/10 | +0.5/2.3% | +1.2/2.2% | ||||
| 06/10 | +0.2/2.2% | +0.2/2.2% | ||||
| 03/10 | +0.5/2.5% | +0.9/2.1% | ||||
| 12/09 | +0.2/2.2% | +0.8/2.0% |
Aside from the reasonableness of putting policy on hold so as to assess the effect of recent stimulus, other reasons not to change the stance now are
- The Bundesbank’s very public discomfort with what has been agreed already.
- A more stable economic environment. The composite PMI in the euro area averaged 49.5 in January and February, connoting a much shallower rate of contraction than in the fourth quarter of 2011, whose composite PMI averaged 47.3. That quarter saw GDP drop at a 1.3% at an annualized rate.
- Greater inflation concerns. Oil prices exceed $106 per barrel versus $79.20 at the end of last September, and the latest batch of purchasing manager survey results revealed a significant intensification of input price pressures.
Tomorrow’s decision with be revealed at 12:45 GMT, and a press conference will commence at 13:30 GMT. The refinancing rate is 1.0%.
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: ECB
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