ECB Draghi: Euro area economy in period of 'protracted weakness'

[FRANKFURT] European Central Bank President Mario Draghi said on Thursday that the euro zone economy was in a period of "protracted" economic weakness, with inflation staying low and the balance of risks tilted towards the downside.

"Incoming information since the last Governing Council meeting indicates a more protracted weakness of the euro area economy, the persistence of prominent downside risks and muted inflationary pressures," Mr Draghi told reporters after a policy meeting.

Nevertheless, he said the bank expected the bloc's economy to eke out "moderate but positive" growth in the July-September quarter.

Mr Draghi urged governments with budget surpluses to step up and boost the eurozone's flagging economy at a time of stiff headwinds threatening the single currency area's outlook.

"In view of the weakening economic outlook and the continued prominence of downside risk, governments with fiscal space should act in an effective and timely manner," said the outgoing ECB chief.

The ECB earlier approved fresh stimulus measures to prop up the euro area economy, cutting rates deeper into negative territory and relaunching an extended bond purchase scheme.

REUTERS,AFP