The European Central Bank will slightly reduce its asset purchases. The ECB expects economic indicators to improve after a year and a half of the health crisis.
The European Central Bank will slow down its bond purchases on the markets. Announcement made this Thursday via a press release.
For the ECB, this is a first step towards the withdrawal of the exceptional measures that were implemented at the start of the health crisis linked to Covid.
The Board of Governors considers that “favorable financing conditions can be maintained with a slightly lower rate of net asset purchases under the pandemic emergency purchase program (PEPP) compared to the last two quarters“.
This support program was created in March 2020, and has a budget of 1,850 billion euros in total.
This announcement comes at a time when economic indicators are very encouraging in the euro zone, as pointed out by Christine Lagarde, President of the European Central Bank (ECB).
“Economic activity is expected to surpass its pre-pandemic level by the end of this year. With 70% of European adults fully vaccinated, this has spurred a significant reopening of the economy, allowing consumers to spend more and companies to increase their production. “
The ECB is revising its growth forecasts upwards. The Monetary Institute expects growth of 5% this year, against 4.6% previously announced. A sharp rebound after a 2020 year of recession.
At the same time, the ECB also expects inflation of 2.2% for 2021. But Christine Lagarde tried to reassure by indicating that the current price increase was probably only “temporary“.
Finally, the European Central Bank has announced that it will not touch its key interest rates.
Next meeting of the eurozone’s major financiers, in December.