At the same time, this will be the best contribution the euro area can make in terms of promoting strong, sustainable and balanced growth in the world. The cyclical recovery in the euro area is largely supported by developments in private consumption, and more recently also investment. Real GDP rose by 0.3%, quarter on quarter, in the second half of last year. Recent data provide some mixed signals as regards the near-term outlook. While hard data show some improvement in January and February, survey data for the first quarter are consistent with a somewhat weaker growth momentum. Nonetheless, the economic recovery in the euro area is projected to proceed at a moderate pace. Domestic demand should be further supported by the ECB’s monetary policy measures, continued employment gains, the low price of oil and a slightly expansionary fiscal stance. The risks to this growth outlook remain on the downside, however, and relate mainly to the heightened uncertainties regarding developments in the global economy. Headline inflation has remained low and its profile continues to be shaped by the path of energy inflation. In addition the recent partial unwinding of the past depreciation in the external value of the euro reduces the upward price pressure from the external side. Looking ahead, inflation in the euro area is likely to display slightly negative rates in the coming months before picking up later in 2016.
The ECB’s asset purchases are being expanded in terms of both size and composition: the monthly purchase volume has been increased from € billion to € billion and the universe of eligible assets now includes non-bank corporate bonds. Purchases are intended to run until the end of March 2017 – or beyond, if necessary – , and in any case until the Governing Council sees a sustained adjustment in the path of inflation to levels close to 2% over the medium term. Taking into account the current outlook for price stability, the Governing Council expects the ECB’s key policy rates to remain at present or lower levels for an extended period of time, well past the horizon of the net asset purchases. We are confident that the very accommodative monetary policy stance will provide further support to the euro area recovery and will accelerate the return of inflation to levels that we consider to be consistent with our objective. The Governing Council has done and, within its mandate, will continue to do whatever is needed to pursue its price stability objective. Our very accommodative monetary policy stance has provided considerable support for the euro area recovery. By supporting growth prospects, our actions have also been beneficial for financial stability.